Sainsbury’s like-for-like growth edged up 0.2% in the first quarter as the grocer ploughed £150m into lowering prices.

Total retail sales were 0.8% ahead in the period to June 30, when grocery revenues advanced 0.5%.

Online grocery and convenience were ahead 7.3% and 3.6% respectively.

Sainsbury’s, which also owns Argos and plans a mega-merger with competitor Asda, said it had outperformed in general merchandise and clothing. Sales rose 1.7% and 0.8% respectively.

Sainsbury’s chief executive Mike Coupe said: “I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March.

“Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year.”

He said that “fundamental changes” to how branches are run, such as a store management restructure to improve efficiency and customer service, and the introduction of “one simple, fair and consistent contract for all Sainsbury’s store colleagues”, means the retailer is “well set up for the future”.

Coupe expected to increase market share further in clothing and general merchandise, including at Argos. Tu clothing has recently been added to the Argos website.

Coupe concluded: “The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury’s and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future.

“We have successfully agreed a financing package of £3.5bn in relation to the proposed combination. The financing has been raised on attractive terms, reflecting the confidence of the lending banks in the outlook for the proposed combined business.”