WM Morrison Supermarkets PLC (LON:MRW) shares gained after it said sales grew over the Christmas trading period on the back of efforts to improve customer service and offer competitive prices.
Group like-for-like (LFL) sales, excluding fuel, rose 2.8% in the 10 weeks to January 7. This included a 2.1% increase in LFL retail sales and a 0.7% rise in wholesale.
Including fuel, group LFL sales edged up 2.6%.
Morrisons figures look pretty impressive - lfl sales +2.8% in 10 weeks to Jan 7th, Christmas period (6 weeks to Jan 7th) +3.7%
— Neil Wilson (@neilwilson_etx) 9 January 2018
Group LFL sales over Christmas and New Year in the six weeks to January 7 were up 3.7%, including a 2.8% increase in retail and a 0.9% gain in wholesale.
Morrisons said the price of a basket of key Christmas items were the same as last year despite input cost pressures arising from a weaker pound and tough competition between grocers.
"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. This strategy appears to have borne fruit in the form of volume growth however," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
READ: Morrisons notches up eighth consecutive quarter of like-for-like growth but momentum continues to slow
The number of customers increased with LFL transactions rising 2.3% across the 10-week period, driven by 25% growth in its ‘Best’ premium range.
Its grocery delivery service, ‘Food to Order’, which is available in store and online, achieved a 50% jump in sales.
Total online sales rose 10%.
Morrisons started supplying McColl's stores earlier than initially planned under an agreement announced in August, which supported wholesale sales.
Under the deal, the supermarket is to supply all 1,650 McColl's stores. McColls will be exclusively supplied with around 400 Safeway own-brand products.
It said it will be a rolling programme of around 25 additional McColl's stores each week.
READ: Morrisons does best of the big four as hard discounters continue to gain share
"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,” said Morrisons chief executive David Potts.
Full year expectations were left unchanged.
Shares rose 4.50% to 237p in early deals.