Sainsbury has seen fourth quarter sales growth dip and blamed a cut back on price promotions while it focused on reducing costs in slower markets both at home and at its US operations.

In the 11 weeks to March 22, UK like-for-like sales, including petrol, fell to 1.3% down from 2.8% in the previous quarter.

For the full-year total sales were up 3.4% and like-for-like sales were 2.3% ahead.

Group chief executive Sir Peter Davis said: “With hindsight in quarter four we probably went too far in reducing promotions and operating costs to achieve the profit target, at the expense of sales, in what turned out to be a soft market."

He added that despite slower markets the group had achieved steady sales and its transformation programme remains on track to deliver £200m of cost savings.

In the US, fourth quarter total sales at Shaw's supermarkets grew 0.7% and 2.1% over the full-year.

Sir Peter said Shaw's had performed well despite challenging economic conditions and has delivered better like-for-like sales growth than many of its US peers.