J Sainsbury, Britain's third-biggest supermarket group, beat forecasts for fourth quarter sales growth as it won market share from rivals.

We continue to outperform the market and gain market share, said Chief Executive Justin King.

He said although the economic climate was likely to remain challenging Britain's roster of summer events, including celebrations to mark the Queen's Diamond Jubilee and the London Olympics and Paralympics, were opportunities for growth.

Sainsbury's which lags Wal-Mart's Asda and British market leader Tesco by annual revenue, said sales at stores open more than a year rose 2.6 percent, excluding fuel but including VAT sales tax, in the 10 weeks to March 17.

That beat analysts' average forecast of 2.1 percent, according to a company poll, and was slightly better than its performance in the previous quarter.

The outcome reflected the success of Sainsbury's Brand Match pricing promotion and growth in convenience store sales, non-food items and online.

Sainsbury's peers are yet to report on periods which significantly overlap. However, market share data has shown the firm at or near the front of the sector in recent months, while Tesco has lost ground.

In January Tesco issued its first profit warning in living memory and last week it parted company with its UK CEO.

Retailers across Europe are mostly struggling as disposable incomes are squeezed by rising prices, muted wage growth and government austerity measures, and as shoppers worry about the impact of the euro zone debt crisis.

Prior to Wednesday's update analysts' consensus for Sainsbury's 2011-12 underlying pretax profit was 700 million pounds, up from 665 million pounds in 2010-11.

Shares in Sainsbury closed Tuesday at 305 pence, valuing the business at 5.72 billion pounds ($9.07 billion) ($1 = 0.6307 British pounds)

(Reporting by James Davey; editing by Kate Holton)