Morrisons sales at top end of forecasts

Wm Morrison confirmed its position as the fastest-growing of Britain's top four supermarket groups on Thursday with a rise in third-quarter sales driven by a focus on fresh foods and low prices.

The fourth-biggest grocer behind J Sainsbury, Wal-Mart's Asda and market leader Tesco said sales at stores open a year rose 2.4 per cent in the 13 weeks to October, excluding fuel and VAT sales tax.

That compared with 2.2 per cent growth in the first half of its financial year and was towards the top end of analysts' forecasts, which ranged from 1.7 per cent to 2.5 per cent.

Retailers are mostly struggling as shoppers' disposable incomes are squeezed by higher prices, muted wages growth and government austerity measures, and they worry about a fragile economic recovery.

Morrisons has outperformed larger rivals for several quarters, thanks in part to its lower exposure to discretionary non-food goods. It also thinks it is benefiting from producing more of its own fresh food than any of its rivals, and employing more specialist butchers, bakers and fishmongers.

"We remain cautious on the overall economic environment and will continue to manage the business accordingly," Morrisons said.

"The board's financial outlook for the year remains unchanged," it added.

Sainsbury's reported a one per cent rise in underlying sales for the 16 weeks to 1 October and Tesco a drop of 0.7 per cent for the 13 weeks ended August 27 - their fiscal second quarters.