Sainsbury's rubbed Tesco's nose in it today with better than expected sales figures for the quarter.

Sainsbury's like-for-like sales excluding fuel rose 2.6 per cent, higher than the forecast 2.1 per cent. There was a 2.1 per cent rise during the previous quarter, which included Christmas.

The FT published this upbeat statement from Sainsburys CEO:

We have demonstrated that delivering quality and value is a compelling offer for customers. The economic climate is likely to remain challenging, and we are committed to helping customers make their money go as far as possible. Nonetheless, the Diamon Jubilee, Olympics and Paralympics are wonderful opportunities this year for the coundtry to join together and celebrate, and we expect these to underpin our continued growth as customers trust Sainsbury's to make their celebrations really special.

The figures came in stark contrast to Tesco's performance, which suffered over Christmas, reporting poor sales figures.

Cliona Lynch, senior retail analyst at Verdict research, said that Sainsbury's "live well for less" campaign had helped.

She said that Tesco's big price drop had failed to resonate with customers, as Sainsburys brand match campaign - where all Tesco's changes in pricing were mirrored - "took all the bite out of it".

Tesco may also have fallen victim to its position as the market leader, which leaves it less room to grow.

Sainsbury's does not match Tesco for size, but has done well even when compared to its more equal sized peers - beating Asda and Morrisons. The positive news caused retailers to rise across the board: Marks and Spencer rose 1.7 per cent, Kingfisher rose 0.4 per cent, and Debenhams was up 3.6 per cent.