UK supermarket group Sainsbury's said it saw sales growth slow in its latest quarter, reflecting price cuts in a competitive market.
The UK's second biggest supermarket group agreed a £7.3 billion takeover of rival Asda in April.
Sainsbury's said today that retail like-for-like sales, excluding fuel, rose 0.2% in the 16 weeks to June 30, its fiscal first quarter.
That was ahead of analysts' average forecast for a fall of 0.1% but below growth of 0.9% in the previous quarter.
"The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March," the company's chief executive Mike Coupe said.
"Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year," he added.
The company said its total retail sales rose 0.8%, excluding fuel.
According to the most recent industry data and company updates Sainsbury's has seen the weakest trading among Britain's big four grocers, which also includes market leader Tesco and Morrisons.
Shares in Sainsbury's have risen 32% so far this year on the back of deal to buy Walmart owned Asda, which is currently being probed by Britain's regulator, the Competition and Markets Authority (CMA).
The deal would see the combined group overtake Tesco as Britain's biggest grocer.
The CMA's probe is expected to be lengthy and Sainsbury's does not anticipate the deal being concluded until he second half of 2019.
Sainsbury's said today that it has agreed a financing package of £3.5 billion for the deal.
"The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury’s and Asda will create a dynamic new player in UK retail," said Coupe.