Sainsbury's is in the middle of a major promotional campaign

Like for like sales, excluding petrol, during the 16 weeks to 8 October were better than many analysts had expected.

Sainsbury's is trying to close the gap between itself and better performing rivals such as Tesco.

The 136-year old retailer is spending �10m revamping its image and has launched a new slogan that urges customers to "Try something new today".

In early afternoon trade in London on Friday, Sainsbury's shares were up 1.3% at 280 pence.

Recovery strategy

During the past quarter, same-store sales including fuel were up by 4.1%, and total sales were up by 6.6%.

Sainsbury's said its performance marked the third straight quarter of like-for-like sales growth.

Our prices are much sharper than they were a year ago Justin King, chief executive See Sainsbury's share price Has Sainsbury changed?

Chief executive Justin King has been trying to lure customers back to his stores with promises of lower prices and better stocked shelves.

Speaking to the BBC, Mr King said that his efforts were paying off and the company was seeing price deflation in its stores - he estimated that prices were down 1.7% during the most recent quarter.

According to The Grocer magazine, Sainsbury's has had the cheapest shopping basket for three weeks running.

Early days

"Our prices are much sharper than they were a year ago," Mr King said during an interview on BBC television.

As part of his shake-up, Mr King overhauled Sainsbury's supply and IT operations.

He also has closed stores, cut head office jobs and put back the roll out of its petrol station-based convenience stores.

Mr King admitted that his plan was in its early days, saying that Sainsbury's was not getting things right at every store, every day.