Sir Peter is unhappy with sales

Summer heat failed to give the chain the boost its rivals saw, with like-for-like sales for the three months to 11 October falling 0.2%.

The figures were a marked deterioration from 0.3% growth the group saw in the previous three months.

Chief Executive Peter Davis said he was not satisfied with the sales performance, which he blamed on disruptions due to his transformation plan.

However, he did say underlying profits had risen in the first six months of the financial year, adding: "We are ahead of this time last year."

The performance compares poorly with market leader Tesco's sales growth of 6.3% in the first half of the year and growth of 9% at William Morrison's during the same period.

Shake-up

Sainsbury's is undergoing a major shake-up including modernising stores, opening new distribution depots and new IT facilities.

The chain is also introducing a range of non-food products in a bid to take on rivals Tesco, and in particular Wal-Mart owned Asda.

Sir Peter said the chains current shake-up had badly hit some stores, with those served by its new depots being the worst affected as they were left with too few products on the shelves.

But Sir Peter said Sainsbury's was working to improve availability.

"The goods are there, there are just not enough of them," he admitted.

Buying more shops

Earlier this month, the group was barred from bidding for Safeway - along with other supermarket rivals.

However, Sir Peter said he expected to be allowed to bid for 24 sites that Morrison would have to sell in the event of a takeover.

He added other chains would only be able to pick up a number of the 54 stores Morrison will have to divest if it bought Safeway.

The decision on the number of sites Sainsbury is will be allowed to bid for is down to the Office of Fair Trade, but Sir Peter said he expected to bid for most or all of the stores he can.