Posh grub helps Morrisons pull a Christmas cracker

Supermarkets are leading the FTSE 100 risers today after positive data on the sector’s sales over Christmas – and a strong update from Morrisons.

In terms of individual chain performance, Nielson’s figures showed Aldi with the biggest year-on-year growth among the grocery retailers with sales up 17% in the four-week period and nearly one million new shoppers compared to last year.

Tesco’s revival received a further boost with a 1.3% sales increase helped by improvements to its fresh food range, although its market share fell 0.1 percentage points to 28.2%.

Morrisons, which has been seeing a steady recovery in sales thanks to an overhaul being led by Mr Potts, said its online arm contributed 0.6% to the like-for-like sales hike over the nine-week period.

Total sales were also up (by 2 per cent excluding fuel or 4 per cent including fuel), despite the continuing impact of store closures.

“We are delighted to have found our mojo”, Chief Executive Officer David Potts said on a call with reporters.

‘Morrisons has taken action on pricing and is now more competitive at the tills, which are ringing more often as the impressive growth in transaction numbers shows, ‘ said George Salmon, equity analyst at Hargreaves Lansdown.

The new “Best” range was said to be already proving very popular, with more than half of customer baskets including at least one “Best” item.

Kantar head of retail insight Fraser McKevitt commented: “Despite widespread anticipation of higher prices shoppers are yet to feel the pinch of rising inflation”. Analysts have predicted an underlying pre-tax profit of £326 million ($395 million) for the year, but Morrisons says the figure is now likely to be between £330 million and £340 million. “With Christmas Eve falling on a Saturday and giving shoppers more time to buy their final festive trimmings, the single busiest shopping day of the year was Friday 23 December with over half the population braving a grocery store”.

Supermarket sales grew by 1.8pc over the period as shoppers splashed out over Christmas, according to Kantar.

Sainsbury’s registered a sales decline of 0.1 per cent, but Asda had a far more hard period – down by 2.4 per cent.

Up-market retailer Waitrose’s market share rose to 5.3% from 5.2%, and sales climbed 3% to GBP1.46 billion.