NEW. Supermarket sales over Christmas

'Excellent' sales for  Morrisons

Supermarket chain Morrisons has said it had an "excellent" Christmas, with like-for-like sales excluding fuel up 8.2% in the six weeks to 4 January.

The company has been focusing on fresh 

food and promotional offers

The Bradford-based group said its results were helped by its focus on fresh food and promotional offers.

Last week, Tesco said its like-for-like Christmas sales rose 2.5%. Sainsbury's earlier reported a 4.5% rise.

Morrisons said it remained cautious on the outlook for consumer spending, with the market set to stay challenging.

 We believe it will become harder for Morrisons to improve market share in a more competitive market

Freddie George, Seymour Pierce

According to recent data from market researcher TNS Worldpanel, Morrisons reached its highest market share to date in the 12 weeks to 28 December of 11.9%.

"I am pleased with Morrisons excellent Christmas trading, having attracted 2.2 million extra customers with great fresh food and industry leading value," Morrisons chief executive Marc Bolland said in a trading update.

But the group's shares opened slightly lower despite the news.

"We believe it will become harder for Morrisons to improve market share in a more competitive market, which is likely to see greater discounting from Tesco trying to recapture market share," said Freddie George, a retail analyst at Seymour Pierce stockbrokers.

sourced from The BBC

Tesco sees 'challenging' trading Tesco has seen challenging trading conditions
	Supermarket giant Tesco has reported sales growth in line with expectations for the key Christmas period, but said trading conditions were "challenging". Like-for-like UK sales, excluding petrol, rose 2.5% in the seven weeks to 10 January. Adjusting for the lower value added tax rate, sales rose 3.5%. Total group sales rose by 11.6% during the period, helped by overseas growth. The economic slowdown is forcing consumers to cut their spending, notably on non-essential goods. Balance sheet A survey of the UK economy, released on Tuesday by the British Chambers of Commerce (BCC) suggested there had been a "frightening deterioration" in the UK economy towards the end of 2008. While Tesco's UK like-for-like sales growth was the slowest since the early 1990s, Sainsbury's reported last week that it had enjoyed its "best ever Christmas", with sales up 4.5%.  As a business, it's so big that it can cut prices to win customers, and then share the pain of those lower prices with suppliers Robert Peston, BBC business editor	Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said: "Tesco, once the darling of the sector in analysts' eyes, has somewhat fallen out of favour of late and this update is unlikely to reverse the trend." The figure "will possibly be dwarfed by Morrison's number next week. The aggressive nature of cost cutting by its competitors is clearly giving Tesco food for thought at the current time," he added. But BBC business editor Robert Peston points out that Tesco, as well as selling food, an essential item, has two "enormous advantages" over other firms. "It has a massive and fantastically strong balance sheet - so it is not constrained by the shortage of credit that's mullering smaller businesses," he said. "And as a business, it's so big that it can cut prices to win customers, and then share the pain of those lower prices with suppliers." Overseas growth Tesco, which operates in 13 countries, said its performance had been "against the background of challenging trading conditions in all of our markets caused by the global economic slowdown". The latest figures come after the supermarket saw UK sales growth of 2% in the 13 weeks to 22 November. While UK trading conditions remain difficult, the firm has benefited from international sales, which were up by 32.7%. Sales in Asia were especially strong, up 43%, while European sales grew 24%. The supermarket described online sales as "very strong" in the run-up to Christmas, with tesco.com and Tesco Direct seeing total combined sales up 18% at £273m. Shares in the firm ended Tuesday up 0.4%, 1.3 pence to 351.60p. sourced from The BBC Festive trade cheers Sainsbury's Sainsbury's has said it enjoyed its "best ever Christmas performance" after recording strong sales growth in the last three months of 2008. In the 13 weeks to 3 January, the supermarket group saw like-for-like sales, excluding petrol, rise by 4.5% from a year earlier. Sainsbury's added that 23 December was its busiest trading day to date. Trading was helped by a huge increase in demand for its "basics" range, which saw sales rise 40% from a year ago. Total sales, which includes new store openings, were up 5.3% compared with the same period a year before. Sainsbury's has 509 supermarkets, 276 smaller convenience store outlets and employs 150,000 people. 'Good progress' Despite the better-than-expected trading performance, Sainsbury's chief executive Justin King said the economic environment remained "particularly challenging", and that this was expected to continue in 2009.  Concerns still persist that a highly vulnerable UK economy leaves Sainsbury more exposed than rivals such as Tesco Keith Bowman, Hargreaves Lansdown Stockbrokers The firm said its online sales had risen by 27% during the quarter, helped by a record number of orders in the week before Christmas. Sainsbury's also said that it had enjoyed "good" growth in its non-food business. It said it was "delighted" with sales of Tu, its own-brand clothing range, and said it was now the eighth-largest retailer by volume in the UK clothing market, with a share of 2.3%. "Sainsbury appears to be gauging the mood of UK consumers extremely well," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers. "The group is capitalising on its perceived offering of quality products, combining aggressive pricing promotions in hope of capturing consumers' desire to 'feel good' in the face of an economic downturn whilst reducing expenditure." However, Mr Bowman added that there were worries that price-cutting promotions could hit profit margins. And he added: "Concerns still persist that a highly vulnerable UK economy leaves Sainsbury more exposed than rivals such as Tesco, with its international portfolio." Mixed picture Sainsbury's is the first of the major supermarket chains to report its trading in the run-up to Christmas. Updates from other retailers have suggested that trading over the festive season was not as bad as some had expected. This week, Marks and Spencer, Next and Debenhams have all reported a fall in like-for-like sales over the festive period, but the declines were not as bad as had been feared by some. More retailers issued their Christmas trading updates on Thursday: Discount fashion retailer Peacocks said like-for-like sales for the two weeks to 3 January had jumped by 22% from a year ago, and announced plans to open up to 50 new stores over the next two years creating up to 750 jobs. The privately-owned chain already has 526 stores • Department store group House of Fraser said like-for-like sales had fallen 1.5% in the five weeks to 3 January, but added that its profit had increased over the festive period • Fashion brand Ted Baker said total sales from 1 November to 24 December had risen by 7.2% from a year ago, but said it expected full-year profit to be at the lower end of market expectations • Wine warehouse chain Majestic Wine said UK like-for-like sales had dropped 2.9% in the 10 weeks to 5 January, with champagne sales falling. sourced from The BBC