Morrisons posted its fourth consecutive Christmas of growth today, crediting competitive pricing of key festive foods and customer service for its strong performance.
Excluding fuel, total sales at the supermarket rose by four per cent in the nine weeks to 6 January, while like-for-like sales grew by 3.6 per cent, with retail contributing 0.6 per cent of that growth and wholesale providing the rest.
Including fuel, sales grew by 3.8 per cent.
However, shares fell 3.7 per cent after figures showed that Morrisons' market share had slipped as Aldi and Lidl increased their stakes.
Morrisons said that keeping its price of key Christmas goods identical to last year helped it win over shoppers, and said customer satisfaction – a key measure for the supermarket – had increased significantly.
Chief executive David Potts said: “This is Morrisons’ fourth consecutive Christmas of like-for-like sales growth during the turnaround.
“Our performance shows colleagues are listening hard and responding to customers, providing consistently great value and good quality when it matters most. I would once again like to thank the whole Morrisons team for what they continue to do for our customers.
“Morrisons is well set to keep improving the shopping trip and become more and more relevant for more customers.”
The supermarket is part-way through a business turnaround that has seen it return to steady growth after being forced to close stores in 2015, recording its best quarter in nine years last September.
Martin Lane, managing editor of money.co.uk, said: “Morrisons have their work cut out to retain their market share. With Aldi nipping at their feet, they’ve announced massive price reductions in an attempt to keep customers coming through the door."
Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, added that pressure from the supermarket industry's discounters has forced Morrisons to double down on cheap prices.
“Tucked away in the Christmas trading update was what really attracted shoppers – not cheery staff and faster checkouts, but last year’s prices," she said.
“But while Morrisons has held its own, with a 3.6 per cent rise in group sales, that’s a far cry from Aldi’s 10 per cent rise and less than the 4.5 per cent it achieved in the first half of the year.
“Investors will just hope the UK’s fourth-largest supermarket group isn’t leading the charge in a race to the bottom.”
Morrisons’ Christmas update comes after Aldi posted a record December haul of £1bn in sales, while Selfridges posted strong performance over the festive period.