Supermarket chain Morrisons has reported a notable acceleration in sales growth over the crucial Christmas trading period, navigating what it described as a "competitive" market.
The UK’s fifth-largest grocer reported like-for-like sales growth of 3.4 per cent in the six weeks to 4 January.
The group "cheered a good performance in a competitive market", with strong demand for its own-brand premium range seeing sales jump 17.4 per cent.
Non-food sales also rose by 10 per cent, and its clothing range saw a 4.7 per cent increase over the Christmas period.
This festive sales jump represented an improvement on trading in the full-year to 26 October, when like-for-like sales lifted 2.8 per cent, with growth slowing to 2.4 per cent in the final quarter.
However, Morrisons said underlying earnings remained flat at £835m for the year, despite facing significant headwinds.
These included rising costs and a cyber incident that caused an IT systems outage just before Christmas 2024, impacting product availability.
The group, owned by US private equity firm Clayton, Dubilier and Rice, highlighted that measures in the 2024 budget, such as last April’s national insurance contributions tax hike and the minimum wage rise, sent costs surging by £200m in the past financial year.
Rami Baitieh, chief executive of Morrisons, said: “In a year when consumers were feeling the squeeze, we grew like-for-like sales for a 12th consecutive quarter, maintained Ebitda (earnings before interest, taxes, depreciation, and amortisation) and our market share.”
He said the results “demonstrated our resilience in the face of some tough external headwinds, from the cyber incident, rising inflation and Government cost increases, which we worked hard to offset”.
He added: “We had a good Christmas in 2025, providing a solid foundation for the first quarter.
“As we enter 2026, the grocery market remains competitive and we are committed to our focus on delivering good value and keeping prices low for customers, announcing a further 2,500 price cuts at the start of January.”
But recent industry data from Worldpanel suggested Morrisons’s market share slipped over Christmas, to 8.5 per cent in the 12 weeks to December 28, down from 8.6 per cent a year earlier.
The gap with rival Lidl is closing and experts have said the German discounter could overtake rival Morrisons in the coming months if its current momentum continues.
Morrisons said it cut costs by £233 million in the year to 26 October, while its debt fell by another 10 per cent and is now down 46 per cent from a peak seen in 2022.
Jo Goff, chief financial officer of Morrisons, said: “We worked hard during the year to offset the significant and unexpected cost headwinds arising from the Government’s 2024 budget and other inflationary pressures, with our cost reduction programme delivering savings of £233 million, to take the total to date to £845 million.
“We expect to exceed our £1 billion savings target by the end of 2025-26.”
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