Morrisons sales soar after shoppers splash out on festive range
Morrisons has hailed its strongest festive sales growth for seven years after it tempted shoppers to "splash out" on its revamped premium range including macarons and gold-dusted salmon.
Chief executive David Potts said the group had "found our mojo" as it posted a 2.9% hike in like-for-like sales excluding fuel for the nine weeks to January 1, meaning full-year profits are set to beat City expectations.
The update sets the scene for an impressive Christmas for the sector thanks to a "remarkable" end-of-year spending spree, according to experts at Nielsen.
They said UK supermarkets enjoyed their best Christmas for four years, with sales up 3.3% across the sector over the four weeks to December 31.
Morrisons shares leapt more than 4% higher, with the festive sales cheer also sending listed rivals sharply higher.
Sainsbury's shares rose 2% and Tesco leapt 4% ahead of their updates on Wednesday and Thursday respectively.
Morrisons said customers traded up for their festive fare, with its new Best range proving popular after it added another 100 premium products over Christmas.
Best-sellers included smoked salmon with gold lustre, while it also sold 50,000 packs of "shimmering macarons".
Mr Potts, who has been leading a turnaround since taking the helm last year, said the group also sold 37,000 Santa-shaped butter packs, as well as 7,000 tonnes of vegetables thanks to a three-for-£1 deal.
Sales of its Nutmeg clothing range were up 30%, while its website notched up its best week for sales over the festive period, with online contributing 0.6% to like-for-like growth.
Mr Potts said Christmas saw customers "splash out and trade up".
He added that while the group remained "firmly in fix mode", he was "delighted to have found our mojo".
The chain is pencilling in underlying pre-tax profits of £330 million to £340 million for the year to the end of January, ahead of City expectations for £326 million and a significant rise on the £242 million a year earlier.
Mr Potts said a raft of changes made under a revival plan had helped drive the Christmas sales growth.
"We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system," he said.
Morrisons recently launched an automated ordering system, using sales data to predict stock needs.
Its sales were also helped by easing food price deflation, with prices down 0.2% during the Christmas period.
The group said it was "difficult to speculate" on inflation for 2017, but the weak pound had forced up the price of some products over Christmas, such as whole salmon.
Separate figures from Kantar Worldpanel showed prices rose 0.2% across the sector over the 12 weeks to January 1 - the first food price inflation for more than two years.
Retail analysts at Bernstein said it was a "great Christmas" for the sector.
They added: " This is a very strong result for Morrisons and is the second year in a row of positive like-for-like sales at Christmas, now building growth on growth."