J Sainsbury chief executive Justin King yesterday maintained that the UK economy was far from recession but it wasn't enough to stop the market knocking 4% off the value of the supermarket chain after investors fretted about the future.

King was in ebullient mood yesterday having met all his targets for a three-year turnaround of the company with 13 successive quarters of like-for-like sales growth and profits double what they were in 2004.

The news could see the company's 117,000 staff share in a bonus pool of £47m with King himself likely to pocket 1.66 million shares for meeting the turnaround plan's targets, worth around £6.5m at current prices.

Yesterday King maintained his position among the optimists on the UK economy.

He said: "We are miles off anything that would be called a recession," he said. But he did caution about the danger that "we will talk ourselves into a bad place and convince ourselves its is worse than it is."

King said he saw little sign of customers becoming particularly price conscious and opting for cheaper products but he said he thought Sainsbury's was benefiting as people opted against dining out and instead bought expensive supermarket food.

But he acknowledged that around 30% of its range is now discounted in some way compared 20% a year ago.

This promotional activity cuts as much as 3% of food bills King maintains and he added that he expected price inflation from supermarkets to stay around the 2% mark unless there was a bad harvest in the Northern hemisphere this year.

"Because of the pressures this year's Northern hemisphere crop will be very important. If it is a buoyant one we will see prices stall and come off."

The 823-strong chain, which expects to open nine supermarkets in the coming year, announced like-for-like sales growth of 3.9% for the year to March 22, which when combined with the opening of new space and the impact of the positioning of Easter gave the company total sales growth of 5.7%.

This translated into an underlying profit before tax of £488m, up 28.4% on the year before. One drag was its Sainsbury's Bank joint venture with HBOS, which meant it had to absorb a post-tax loss of £3m, although Sainsbury's attributed this to an investment in a relaunch of the institution and said underlying bad debts were down.

The company announced a full-year dividend of 12p, up 23.1% on the year before.

But some analysts still worried that there was little direction of where future growth would come from in a market some see as already saturated and facing a consumer slowdown.

King maintained that, unlike rivals such as Tesco, it would not expand overseas. He said the company would spend £15m in developing its non-food business online.

The company's weakest market position is in Scotland. UK-wide it takes a 14.8% share, including almost a quarter of the London grocery market. In Scotland it takes just 6.1%.

The shares closed 15.25p lower at 374.5p.