Sainsbury’s profits rose 5.3% last year despite pressure from low-cost competitors.
The supermarket reported underlying profit before tax of £798m in the 12 months to 15 March, while retail sales grew 2.7%, or 0.2% on a like-for-like basis.
The big UK supermarkets have struggled to counter the rise of discounting rivals Aldi and Lidl, with Tesco reporting a 6% fall in annual profits and Morrisons and the Co-op recording losses.
CEO Justin King, who steps down in July, said conditions in the grocery market would continue to be challenging while consumers spend cautiously.
“In a competitive retail environment we have focused on delivering high-quality, affordable own-brand products across all our channels, helping customers to live well for less,” he said.
“We remain committed to investing for the future and continue to see significant opportunities for growth.
“We remain confident that our differentiated offer, supported by the ‘value of values’, Nectar data and Brand Match, will allow us to outperform our peers in the year ahead.”
In the last year Sainsbury’s opened 13 supermarkets and 91 convenience stores, as well as expanding six supermarkets.
Sales of the business’s own-brand ranges grew twice as fast as branded goods in both value and volume.
The high-end Taste the Difference range recorded double-digit growth and more than £1.1bn of sales.