Jeremy Warner: At least Sainsbury is booming...

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Outlook Justin King, chief executive of J Sainsbury, has again confounded the sceptics with yesterday's trading update. He'll struggle to beat the still recovering Morrisons, but it's highly likely he's out-traded his other two main supermarket rivals, Asda and Tesco, over the Christmas trading period. Few thought Mr King could pull off a sustained improvement when he was parachuted in four years ago, yet this is his sixteenth quarter of rising like-for-like sales with few signs of him stalling.

To the contrary, Sainsbury's middle market position, once thought of as an extreme handicap, caught as it was between Waitrose and M&S at the top end of the market and Tesco and Asda at the "value" end, has turned out to be a real boon. As the recession bites, Sainsbury finds itself a significant beneficiary of the trading down phenomenon from more upmarket brands, while the introduction of its "basics" range is enabling the company to compete more effectively at the bottom too.

The next challenge for Mr King is to do to the margin, which was collapsed when he first came into the job to address the company's lack of price competitiveness, what he's so successfully done to the sales. In this environment, that's a big ask. Shareholders will still be cursing the board's failure to secure a firm bid from the Qataris at the mooted, pre-credit crunched price of 610p a share. They may have to wait quite a while to see that price again, but in the meantime, Mr King is at least delivering all that could be expected of him and some on the operational side.