Sainsbury’s is to raise £445m to fund an accelerated growth drive and deliver an extra 2.5 million sq ft of trading space by March 2011.

The retailer also disclosed a 7.8 per cent rise in first quarter like-for-likes excluding fuel and impact of the VAT rate change and has agreed to buy another nine stores from Co-operative Group.

Sainsbury’s will raise the new cash by a share placing and convertible bond offer.

Sainsbury’s chief executive Justin King said: “Over the past four years we have reinvigorated our business and demonstrated the strength of Sainsbury’s brand with 18 consecutive quarters of like-for-like growth.

“The fund raising will provide us with the financial flexibility to take advantage of current opportunities to grow our business further and faster.

“We can speed up our growth in areas of lower market share, maintain the strength of out balance sheet and invest in the long-term growth of the business.”

The grocer intends to add more freehold and long leasehold sites, improve its existing estate with extensions and more non-food ranges and continue to develop its c-store business.

During the first quarter Sainsbury’s said product availability and customer service metrics “reached new record levels”. Another round of price cuts at the start of June brought the total number of reductions since the start of the year to 7,000.

Tu clothing achieved its best quarter and online food sales rose 20 per cent. In the third quarter, Sainsbury’s will launch an 8,000-product non-food e-tail offer in the third quarter.