A tough spring for Britain’s supermarket giants was underlined today as Sainsbury’s posted lower underlying sales for the second quarter in a row.

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Chief executive Justin King, who is leaving the chain next month after 10 years in charge, said consumers continued to spend cautiously, leading to the slowest industry growth in a decade.

Like-for-like sales at the UK’s third biggest supermarket chain were 1.1% lower when excluding fuel in the 12 weeks to June 7, although the total sales figure, which includes changes in store space, was 1% higher than a year earlier.

In the previous three months Sainsbury’s saw like-for-like sales drop 3.1%, its first quarterly decline in nine years, reducing growth for its financial year as a whole to just 0.2%.

All four major supermarket retailers have found themselves squeezed by the rapid growth of German discount chains Aldi and Lidl, with Morrisons and Tesco particularly affected.

Mr King said Sainsbury’s continued to invest in reducing prices, adding that he is confident the strategy will enable the chain to outperform its peers.

He said: “We expect customer spending to remain cautious and we will continue to invest to keep our offer competitive to help customers balance their household budget.”

Sainsbury’s said its clothing business achieved double-digit like-for-like sales growth in the quarter, including its best ever sales week in womenswear.

It added that lingerie sales improved 18% on a year earlier, while childrenswear was 15.8% higher.

Shares in the supermarket rose 2% in early trading amid relief that the overall decline in sales was in line with City expectations.

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