It's always worth checking the label on supermarket own-label wines. This is produced by Lustau (a bit of a recurring theme I know), who pretty much always deliver quality Sherry. Lustau doesn't do all of Sainbury's own-label Sherry, but the ones they do that I've tried have always been very good.
This is a bargain at only £5.99. It also has a Decanter World Wine Awards silver medal, which is a good indicator of quality.
I personally prefer Amontillado/Oloroso style sherries, but this is a fine example of the lighter, flor-developed style for a great price.
UPDATE: This is really growing on me. Had another bottle of it last week, and I'm really starting to appreciate it, especially for that price. Upgrade to a 3.5.
Manzanilla Superior Sherry
Sanlúcar de Barrameda, Spain