SUPERMARKET Morrisons has thanked surging sales of its premium range and efforts to keep a lid on prices for surprisingly strong Christmas trading.

Group like-for-like sales excluding fuel jumped 2.8 per cent in the 10 weeks to January 7, with retail sales up 2.1 per cent and wholesale 0.7 per cent ahead.

It said it enjoyed an “especially strong” festive season as sales picked up pace in the last seven weeks – up 3.7 per cent across the group after a 2.8 per cent jump in retail and 0.9 per cent wholesale rise.

The group cheered a 25 per cent year-on-year leap in sales of its Best premium range, while it also saw solid sales of its Nutmeg range of children’s clothing and a good response to its recently overhauled non-food offering.

The UK’s fourth biggest supermarket kicked off the festive trading updates with a stronger-than-forecast set of numbers, after analysts had pencilled in a 1.7 per cent rise in group sales for the 10 weeks.

Shares lifted 4 per cent before paring back to stand 2 per cent higher after its trading update, with gains for retail rivals Sainsbury’s and Marks & Spencer, up 2 per cent and 3 per cent respectively.

Morrisons said it kept the price of a basket of key Christmas items the same as last year, resisting price hikes for squeezed consumers in the face of surging costs.

Shopper spending power has been hit hard by Brexit-fuelled inflation, which has outstripped paltry wage growth throughout most of 2017.

Wider food price inflation rose around 3 per cent at the end of the year, although Morrisons said this was set to pass through in 2018 with the prices of some produce, such as seafood, already coming down.

Online sales at grew by more than 10 per cent, with the group delivering to more areas of the UK through its partnership with Ocado.

Its update came as Kantar Worldpanel figures showed the group’s share of the supermarket sector slipped to 10.7 per cent over the Christmas quarter from 10.9 per cent a year earlier despite rising sales, with the Big Four chains continuing to come under pressure from German rivals Aldi and Lidl.

David Potts, chief executive of Morrisons, said after three years in a row of sales growth, the group was now “open for business for new stores” and plans to open a “handful” of new supermarkets a year, including in 2018.