Morrisons reported strong Christmas trading numbers this morning - here are the best reactions

Caitlin Morrison
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Morrisons set a high bar with its Christmas trading update (Source: Getty)

Morrisons is having a lovely morning, with shares up four per cent on news that the supermarket's sales growth over the Christmas period was at its strongest for seven years.

The group reported a 2.9 per cent jump in like-for-like sales excluding fuel, and said Morrisons.com had achieved its biggest ever week for sales in the nine weeks to 1 January - and retail experts were duly impressed with the supermarket's numbers.

Exceptional turnaround

"Having already fired the first shot in the 2017 price war, (Morrisons) is out of the blocks with a robust set of numbers and a fifth consecutive quarter of growth in like-for-like sales," said John Ibbotson, director at retail consultancy Retail Vision.

"It's a turnaround that is looking more impressive by the day and the discounters are finally being reeled back in. They're suddenly looking human and are only really taking market share by opening stores.

"Compared to two years ago when Morrisons was on the canvas, the turnaround is exceptional."

Ibbotson added that, while there's still work for the group to do, he believes "Morrisons is safely into sustained recovery territory".

And he said the falling pound could have less of an impact on Morrisons than its rivals, as a high proportion of its food is produced in the UK - this will be something of a relief given today's news that major supplier Premier Foods is looking at hiking prices, in large part due to the decline in sterling.

Pricing action

Hargreaves Lansdown's George Salmon noted that Morrisons had "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".

"That must be music to the ears of David Potts, who has steered the group to a much more positive position than during the dark days of the last few years," he added.

"In the wake of this positive update from Morrisons, all eyes will now be on the sector’s other big players, Tesco and Sainsbury's, when they report later in the week. With figures from the BRC painting a positive picture for food sales across the country, hopes will be high that both can follow suit and deliver more positive numbers.”

Setting the bar high

Ken Odeluga at CityIndex agreed that Morrisons had set the bar high for its competitors, "with figures that reaffirm its transformation last year from an ‘also ran’ into a serious threat to rivals like Sainsbury’s"

"Whilst a wider tightening is afoot among the big British grocers on the back of a couple of years of painful efficiency drives and soul searching, and a little help from fading deflation, they will struggle to match milestones Morrisons has posted this morning, including its best underlying sales growth for seven years and unquestionably firm transaction volume," he said.

Odeluga added that there are questions about what he deemed "persistently uncompelling growth in internet sales", which represented a 0.6 per cent like-for-like contribution at Christmas.

But, he continued: "Coming on the back of one of Morrisons' best years this decade, its seasonal update offers little reason for the shares to pare back a near-60 per cent gain in 2016, and, should the stock surpass the 240p level for the first time since March 2014 this morning, a double-digit percentage jump could even be possible."

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