Like-for-like sales for the grocer were up 2.5 per cent (2.6 per cent excluding fuel) for the fourth quarter and up by 4.5 per cent (2.1 per cent excluding fuel) for the full year.
The non-food category and online both grew ahead of the market during the year.
Chief executive, Justin King, commented: "Convenience, online and non-food are all growing ahead of the market, as our multi-channel offer means customers can do more of their shopping with Sainsbury's.
"Against difficult market conditions we are gaining market share in clothing and general merchandise. We are also the fastest growing online grocer. Sales continue to grow at over 20 per cent, with both basket size and order numbers increasing and we now serve on average 165,000 customers a week."
As well as adding 170,000 square feet of store space in the quarter, including two new stores, the retailer now offers click and collect in nearly 900 of its stores.
Sainsbury's is also hoping that key events throughout 2012 will help boost sales further.
King explained: "The Diamond Jubilee, Olympics and Paralumpics ware wonderful opportunities this year for the country to join together and celebrate and we expect these to underpin our continued growth as customers trust Sainsbury's to make their celebrations really special."