British supermarket Sainsbury's said it did not expect tough trading conditions to lift any time soon as it reported a second year of profit decline in a row, dragged down by its own price cuts. 

Sainsbury's has coped better than most with the recent turmoil in the UK supermarket sector.

Today's results did beat analysts' profit forecasts for the 2015-16 year and said its strategy was working well. But the group still issued a cautious outlook for the industry. 

"The market is competitive, and it will remain so for the foreseeable future," its chief executive Mike Coupe said today. "We believe we have the right strategy in place," he added. 

Sainsbury's, which has shown greater resilience to competition from German discounters Aldi and Lidl than its traditional rivals - Tesco, Asda and Morrisons - made an underlying pretax profit of £587m in the year to March 12. 

That compares to analysts' average forecast of £574m and £681m made in the 2014-15 year. 

The firm, which last month agreed a £1.4 billion takeover of Argos-owner Home Retail, said group sales fell 1.1% to £25.8 billion. 

"We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment," the CEO said.

In March Sainsbury's reported fourth quarter like-for-like sales growth, excluding fuel, of 0.1% - its first quarter of growth in over two years. 

Its supermarkets recorded both like-for-like transaction and volume growth as customers responded to lower regular prices, better product quality and availability and improved customer service. 

It said it was on track to deliver its three-year £500m cost saving programme by the end of 2017-18.