Sainsbury's has posted a 10.1% fall in first-half profits to £277m as sales continued to decline.
The supermarket giant said like-for-like sales sales fell 1% in the 28 weeks to 24 September.
It said that while the market remains strong, "pricing pressures continue to impact margins".
Sainsbury's added that the effect of the slump in sterling on retailers was "uncertain" as it braces for an increase in costs over the second half.
Shares in the UK's second biggest supermarket fell more than 6% in morning trading on the FTSE 100.
Despite the fall in sales, chief executive Mike Coupe said Sainsbury's had made "good progress" on delivering its strategy for the UK.
"We have invested in the quality of our products while reducing prices on everyday items, delivering volume growth and outperforming the market in customer service and availability," he said.
Earlier this year, Sainsbury's bought retailer Argos-owned Home Retail Group to expand its non-food offering in the stores.
Mr Coupe said: "By Christmas we will open 30 Argos digital stores and create a further 30 Argos digital collection points in our supermarkets."
Sainsbury's wants to put 250 Argos outlets in supermarkets over the next three years.
German discount chains Aldi and Lidl have expanded rapidly in the UK, undercutting Sainsbury's and its rivals, including Tesco, Morrisons and Asda.
The supermarket chain fought back by cutting prices on its everyday products rather than run promotions.
Sainsbury's profits fall 10% as first-half sales fall