SUPERMARKET group Morrisons has hailed its festive performance, which beat expectations with a 3.7 per cent like-for-like sales growth over the six weeks to January 7.

But as shoppers shrugged off concerns over tighter household budgets and traded up over the period, industry data has suggested Tesco was the big winner.

The first of the major supermarkets to report Christmas sales, Morrisons said it had attracted more customers with competitive prices, expanded premium ranges and an improved online offering.

Morrisons said that in spite of food inflation the price of a basket of key Christmas items was the same as last year. The uplift came with an increase in volume, with like-for-like transactions up 2.3 per cent year-on-year.

Sales to shoppers contributed 2.8 per cent growth to the business, with 0.9 per cent coming from wholesale activities.

Chief executive David Potts said the group’s plan to become a “broader and stronger business” is taking shape after the brisk Christmas trading period.

Shares in the Bradford-based group climbed almost five per cent in early trading before falling back as figures from Kantar Worldpanel showed Tesco was the fastest growing of the big four supermarkets, recording a 3.1 per cent lift in sales in the 12 weeks to December 31.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Overall supermarket sales increased in value by 3.8 per cent, with an additional £1 billion ringing through the tills compared to the same festive period last year.”

The fastest growing supermarket chains were Aldi and Lidl which each grew sales 16.8 per cent, further increasing the pressure on the big four. Kantar showed Morrisons growing sales 2.1 per cent in this period. The supermarket’s own figures, covering the 10 weeks to 7 January saw like-for-like sales up 2.8 per cent, with total sales up 2.6 per cent.

Kantar reported grocery inflation of 3.7 per cent for the 12 weeks to December 31, marking a full calendar year of increases.

Under Mr Potts, who was hired in spring 2015 to revitalise the group, Morrisons has focused on differentiating its range and growing its online and wholesale services.

He said: “More and more customers found more things they wanted to buy at competitive prices at Morrisons this Christmas. 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.”

Morrisons this month begins to supply 1,650 McColl’s convenience stores on a wholesale basis, a move which will see a reintroduction of the Safeway brand to the high street.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Food sales are not as vulnerable to a consumer slowdown as clothing, but given the weak trading backdrop, Morrison’s Christmas trading figures are worthy of a cursory round of applause.”

In its trading update Morrisons said that it expectations for the full year had not changed.