SHARES in WM Morrison made spectacular gains yesterday after the supermarket said it would beat profit forecasts. The announcement, which coincided with research showing that it is grabbing market share from rivals, confirmed Morrisons’ new status as the City’s favourite retail stock.<br /><br />Morrisons grew by 9.5 per cent in the 12 weeks to 12 July compared to the same period last year, figures from TNS World Panel revealed. It easily outperformed the total grocery market in the period, which grew by 5.9 per cent. Tesco grew just 5.7 per cent, Asda 8.1 per cent and J Sainbury 7.7 per cent, according to TNS.<br /><br />Yesterday analysts said it was a remarkable turnaround for Morrisons. It was all but written off following its £3bn takeover of Safeway in 2004, an acquisition masterminded by former chairman Sir Ken Morrison but which soon came to be seen as a step too far. <br /><br />But since the Dutch-born Marc Bolland, 50, joined as chief executive in 2006, he has helped cement the grocer’s transformation from a regional supermarket focused on the North to a nationwide player that is now stealing a march on its rivals.<br /><br />Morrisons grew its market share by 0.4 per cent in the period, taking its share to 11.6 per cent – its highest ever – and beating J Sainsbury and Asda’s 0.3 per cent rises. Tesco lost 0.1 per cent, although with a 30.8 per cent slice of the market it is still the most dominant player by far.<br /><br />“The combination of a strong price-crunch message and the focus on fresh food and sourcing has resulted in Morrisons posting a 22nd successive period of market share growth. It is ringing a bell with customers,” said Chris Longbottom, director at TNS Worldpanel.<br /><br />The supermarket’s new-found reputation as a comeback kid was underlined yesterday when it said annual profits would be ahead of previous forecasts. In an early trading update, the group said it was benefiting from initiatives set up under Bolland’s 2007 three-year strategy as well as improvements to its supply chain and cost savings, which were set to beat its expectations by £20m.<br /><br />Analysts yesterday added between £70m and £80m to the previous consensus profit forecast of £664m for the year to the end of January.<br /><br />Hargreaves Lansdown analyst Keith Bowman said: “All in all, Morrisons is continuing to apply pressure on the rest of the high street, marking out its territory as a prominent value retailer.” Shares in Morrisons closed up 8.19 per cent yesterday at 274p.