SUPERMARKET Sainsbury's has reported a 2.8 per cent fall in like-for-like sales as the sector's price wars continue to bite.

It is the firm's third sales decline in a row, with new boss Mike Coupe warning the downward spiral could continue for the rest of the financial year.

Mr Coupe blamed the decline on the "dynamic and fiercely competitive" supermarket price war.

He said: "In the second quarter, our performance has been impacted by the accelerated pace of change in the grocery market, including significant pricing activity and food price deflation in many areas.

"These conditions are likely to persist for the foreseeable future and we now expect our like-for-like sales in the second half of the year to be similar to the first half."

Sainsbury's has responded to the ongoing supermarket price war by lowering prices on thousands of food lines.

It has switched focus for its Brand Match comparisons to Asda, which began cutting prices a year ago and is the only one of the big four grocers to hold market share over the period.

The supermarket also cut its petrol prices by up to 5p per litre this week..

Its second quarter figures cover the 16 week period to September 27.

The sales fall was not as bad as expected by some analysts, who had been expecting a decline of up to four per cent. For the first half, like-for-like sales were down 2.1 per cent.

Mr Coupe, who took over from Justin King, added: "The market remains dynamic and fiercely competitive.

"The long-running trend of more frequent, convenient shopping has accelerated, resulting in smaller basket sizes.

"An increase in price investment and short-term competitor promotional activity, combined with favourable commodity markets, has resulted in deflation in many areas of our food business."