Sales at Britain's Sainsbury's edge lower in Christmas quarter

LONDON, Jan 8 (Reuters) - Sainsbury’s, Britain’s No. 2 supermarket group, reported a small fall in underlying sales in the key Christmas quarter, hurt by a weak performance from general merchandise.

The group, which is trying to rebuild investor confidence in its strategy following a botched attempt to take over rival Asda , said on Wednesday like-for-like sales, excluding fuel, fell 0.7% in the 15 weeks to Jan. 4, its fiscal third quarter.

That compares with a second quarter fall of 0.2%.

Sainsbury’s said grocery sales grew 0.4% but general merchandise sales were down 3.9%. It cautioned that retail markets remained highly competitive and promotional and the consumer outlook continued to be uncertain. (Reporting by James Davey; editing by Kate Holton)