Bradford-based supermarket giant Morrisons said on Tuesday its group like-for-like (LFL) sales excluding fuel were down 1.7% for the 22 weeks to January 5 — but it still expects full-year profit before tax and exceptionals to be within the current range of analysts’ forecasts.

Morrisons shares rose almost 2% to around 196p to give the firm a current stock market value of around £4.6 billion.

In a trading update, Morrisons said: “Throughout the period, trading conditions remained challenging and the customer uncertainty of the last year was sustained.

“We kept focussed on our priorities and our customers, and continued to invest in the Morrisons price list while managing costs well.

“Our basket of key Christmas items was once again very competitive, with most prices the same as or lower than last year.

“In fuel, our business was affected by a highly promotional market.

“In wholesale we were pleased to grow sales with most of our customers, but overall LFL growth was impacted by the lower total sales at McColl’s, as previously reported by McColl’s for the period up to 24 November. 

“Sales at the first ten conversions from McColl’s to Morrisons Daily convenience stores are strong, and together we plan to extend the trial to another c.20 stores during January and February to further tailor and test the proposition as we begin to transition McColl’s remaining ex-Co-op stores to Morrisons wholesale supply.”

Morrisons CEO David Potts said: “It was encouraging that during an unusually challenging period for sales, our execution was strong and our profitability robust, demonstrating the broad-based progress we have made during the turnaround.”

In its outlook, Morrisons said: “We managed costs well throughout the period, offsetting some of the impact on LFL sales of the challenging trading conditions and continued uncertainty amongst customers.

“With four weeks of the year still to go, we expect 2019/20 profit before tax and exceptionals to be within the current range of analysts’ forecasts.”