SUPERMARKET Sainsbury's has warned of a continuing difficult market after posting a fifth successive quarter of falling sales.

The grocery chain revealed like-for-like sales fell 1.9 per cent for the ten weeks to March 14, compared to a 1.7 per cent drop in the previous quarter.

The company, which has supermarkets and convenience stores across the region, including outlets in Darlington, Middlesbrough, Stockton, is about to report its first drop in annual profits in a decade.

The results left chief executive Mike Coupe to warn of no immediate signs in a let-up of the sector’s price squeeze, admitting the future would be tough.

He said: "Trading remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance.

"During the quarter, we have seen volume growth across the food business and an average uplift of over three per cent on the 1,100 products where we have made reductions.

"But we expect the market to remain challenging for the foreseeable future.

"Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue."

Sainsbury’s, alongside Tesco, Morrisons and Asda, is engaged in fierce competition as its scrambles for market share, which is being gnawed away by discounters Aldi and Lidl.

The firm will report full-year profits in May for the first time under Mr Coupe since he succeeded Justin King, who stepped down last year following a successful decade in charge of the supermarket.

They are expected to show their first fall after nine years of growth, with analysts expecting a 17 per cent decline to £659m, but Mr Coupe said he remained optimistic.

He added: “We consistently outperform our major peers on product quality, and that great value will enable us to better our rivals.

"As we have reduced prices and simplified our promotional offer, we have seen like-for-like transactions grow in the quarter as new customers are discovering the great value we represent.

"Our strategy to deliver a broad range of products and services through our increasingly multi-channel offer is also progressing well.

"During the quarter, our general merchandise and clothing businesses performed strongly, up more than six per cent on last year.

"Our groceries online business saw order numbers increase by 14 per cent, and Sainsbury’s Bank grew sales of its loans."