Sainsbury's boss Sir Peter Davis stood his ground in front of disgruntled shareholders as he defended his record at the helm of the grocery giant.

Facing a barrage of questions on everything from special offers to banana suppliers, Sir Peter admitted he was disappointed with sales in the past six months.

He said: "There is no doubt while implementing significant change in stores and with the supply chain there has been some disruption to the execution of our customer offer."

Despite investing millions of pounds in a turnaround programme, critics have accused Sainsbury's of fuelling profits with cost reductions - including job cuts - while not paying attention to sales.

Shareholder Alan Perryman said the most important issue for the group was its flagging market share, which analysts warned could lead to its relegation to number three in UK grocery rankings.

But Sir Peter denied Sainsbury's was losing market share - it gained 0.1 per cent last year - while Tesco and Asda grew at a faster rate.

The company revealed same store sales rose just 0.3 per cent in the first quarter to June 21 while total sales were up two per cent.

Sainsbury's, which is targeting cost savings of £960 million by March 2005, has been working to improve customer service and its fresh food offering.

It has also revamped its distribution network, bringing four new mega-depots on stream to serve its 500 UK stores, and plans to relaunch its non-food offering, including clothing and children's toys.

Shareholders were angry about a bonus scheme which could net Sir Peter 1.5 million free shares on top of his £750,000 annual pay.

Around ten per cent of votes refused to sanction the board's remuneration report. Including abstentions, 116.6 million votes went against the report while 1.2 billion backed it.