Grocers Sainsbury’s and Tesco have warned that the fear of job losses will be one of the biggest challenges facing UK retailers this year.

Sainsbury’s chief Justin King said: “The number one fear among consumers is job losses and this will have a big impact this year. Consumers are increasingly looking for value because they are worried about the future, and that’s what we are delivering.”

Tesco said it was operating in a “challenging” market and that it will be a tough year against a backdrop of rising unemployment and economic slowdown.

Sainsbury’srevealed third-quarter VAT-adjusted like-for-like sales up 4.9 per cent, excluding petrol, in the 13 weeks to January 3. On the same basis, Tesco delivered UK like-for-like growth of 3.5 per cent for the seven weeks to January 10.

Sainsbury’s said it benefited from its Switch and Save campaign and its Basics range sales were up 40 per cent year on year. Tesco volumes and customer numbers continued to grow and non-food sales strengthened “a little” against the third quarter.

On Tuesday TNS revealed Tesco’s market share had fallen 0.6 percentage points compared with a year ago, while Sainsbury’s held firm and Asda and Morrisons grew. Discounter Aldi notched up a record 3.2 per cent market share.

Separately, on Monday Tesco opened a wood-framed eco-store in Manchester that it claims will be the blueprint for all future shops.