J Sainsbury PLC shares fell on Friday despite the retailer hailing its ‘biggest ever Christmas’ as it delivered market share gains and sales growth.

The London-based supermarket chain said its third-quarter, total retail sales excluding fuel advanced 2.7% in the 16 weeks to January 4 year-on-year. Including fuel, sales were flat.

Excluding fuel again, like-for-like sales rose 2.8% on a year prior.

J Sainsbury shares were down 2.2% to 257.40 pence in London on Friday morning.

For the Sainsbury’s brand alone, sales rose 3.7%, including a 4.1% rise in the grocery offering. Sainsbury’s general merchandise & clothing sales fell 0.1%. Argos sales, meanwhile, declined 1.4% on the prior year.

For the final six weeks of that period alone, tracking the key festive period, Sainsbury’s brand sales rose 3.8% year-on-year, with grocery sales climbing at the same pace. Sainsbury’s general merchandise & clothing advanced 3.4% on-year, while Argos sales rose 1.1%.

‘We have won grocery market share for the fifth consecutive Christmas, with more customers choosing Sainsbury’s for their big shop,’ Chief Executive Simon Roberts said.

‘Driven by our leading combination of quality, value and service, we have achieved seven consecutive quarters of volume performance ahead of the market and further accelerated our two-year volume growth.’

‘The strength of our customer service and operational performance stood us apart in delivering our biggest ever Christmas,’ he said.

The company said its premium Taste the Difference brand delivered 16% sales growth in the key Christmas weeks.

Looking ahead, Sainsbury’s expects retail underlying operating profit in line with consensus and the midpoint of its £1.01 billion and £1.06 billion guidance range. It would represent annual growth of around 7%.

‘This reflects continued operating leverage from Sainsbury’s grocery volume growth, strong growth in Nectar profit contribution and delivery of cost saving targets,’ it added.

It expects total Financial Services underlying operating profit to be around £30 million, above its prior guidance range of £15 million to £25 million. The firm maintained its free cash flow outlook of at least £500 million.

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