Morrisons posts better-than-expected Christmas sales

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The grocer has attributed its strong performance, which beat analysts' expectations of a 1.7 per cent rise, to resisting price hikes despite rising inflation.

The chain sold 2.8% more in the ten weeks to 7 January than it did for the same period a year earlier, not including new store openings.

Morrisons announced a deal to supply convenience chain McColl's in August, and revealed that it supplied tobacco to some of the almost 2000 stores earlier than expected, boosting its wholesale figures by 0.7 per cent.

The UK benchmark index has climbed higher in today's session, finding support in blue-chip retailers as Wm Morrison Supermarkets (LON:MRW) posted better-than-expected Christmas sales.

Automated ordering was live in all stores across most categories, Morrisons said, which helped maintain stock levels throughout the period, while customer satisfaction improved year on year. Morrison also has a tie-up with Amazon as part of the USA tech giant's foray into online grocery delivery in the United Kingdom, so the supermarket has irons in a few fires.

In a statement, Morrisons said: "We also continued to become more competitive and, despite input cost pressures on many commodities, the price of a basket of key Christmas items was the same as previous year".

David Potts, Morrisons' chief executive, said: "Our plans to become a broader and stronger business are progressing well, with another period of positive like-for-like sales and the start of the rolling programme to supply McColl's".

"The supermarket says it has become more competitive, which in an environment of inflationary pressure means it has likely taken some hit on margins, or passed some pain further up the supply chain, or both".

Wholesale is a growing area for Morrisons: it is due to start supplying 1,650 McColls convenience shops and will shortly revive the Safeway brand.