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Sainsbury's has reported a small rise in sales over the key Christmas and New Year period, saying its customer numbers hit a new high.

The supermarket group's like-for-like sales excluding fuel increased by 0.9% in the 14 weeks to 5 January, compared with a year earlier.

The trading update comes two days after rival Morrisons reported a drop in sales over the Christmas period.

Sainsbury's said the week before Christmas was its strongest on record.

It saw customer transactions exceed 27 million during those seven days.

'Cautious spending'

A report on Tuesday by market research group Kantar Worldpanel said that Sainsbury's was the only one of the so-called "big four" UK supermarket groups to increase its market share in the run up to Christmas.

Sainsbury's chief executive Justin King said the company had delivered "another quarter of good sales in a challenging retail environment".

Total sales for the 14-week period, which include those contributed by new store space, were 3.3% higher than a year earlier.

During the 14 weeks, Sainsbury's opened six new supermarkets and 19 new convenience stores. It said it now had 500 convenience stores across the UK.

Looking ahead, Mr King said Sainsbury's remained cautious.

"We expect the challenging economic backdrop to persist, with customers looking to re-balance their household budget after the festivities, and so spending cautiously in the first few months of 2013," he said.

On Monday, Morrisons reported that its like-for-like sales in the six weeks to 30 December were down 2.5% from a year earlier.

It said the figures showed that it needed to improve its promotions, and the importance of online shopping, which it does not offer at the moment.

Tesco is due to release its Christmas sales data on Thursday.

Retail analyst Richard Hunter, of stockbrokers Hargreaves Lansdown, said: "In terms of the festive battle, Sainsbury has thrown down the gauntlet to Tesco ahead of tomorrow.

"The quest for the cost-conscious consumer remains intense, although at the current time Sainsbury is holding its own."