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UPDATE 2-Morrison Xmas sales towards top end of forecasts

Published 01/22/2009, 02:17 AM
Updated 01/22/2009, 02:24 AM
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* Like-for-like sales, ex fuel, up 8.2 percent in 6 wks to Jan. 4

* Full-year profit expectations unchanged

* Cautious on outlook for consumer spending

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LONDON, Jan 22 (Reuters) - Wm Morrison Supermarkets delivered what is likely to be the best Christmas performance among Britain's top four grocers, helped by low prices and promotions, and said its profit expectations were unchanged.

Britain's fourth-biggest supermarket group, which serves 10 million shoppers a week from about 375 stores, said on Thursday sales at shops open at least a year, excluding fuel, rose 8.2 percent in the six weeks to Jan. 4.

Forecasts ranged from 7 to 8.5 percent, with an average of 7.6 percent in a Reuters poll of 10 analysts.

Morrison's performance compares with a 2.5 percent rise in underlying UK sales posted by market leader Tesco for the seven weeks to Jan. 10 and a 4.5 percent rise reported by third-placed J Sainsbury for the 13 weeks to Jan. 3.

Industry number two Asda has said its fourth-quarter sales improved on the 6.9 percent it reported in the three months to Sept. 30, but market researchers TNS and Nielsen both believe it did not match Morrison's performance.

"We remain cautious on the outlook for consumer spending and we expect the market to remain challenging," Morrison, which is also one of Britain's top five food producers, said.

It added that, adjusted for the impact of November's cut in value-added sales tax, underlying sales rose 9.2 percent.

Morrison shares have outperformed the DJ Stoxx European retail index by 5 percent over the past year. They closed at 264.25 pence on Wednesday, valuing the business at about 7.5 billion pounds ($10.3 billion). ($1=.7275 pounds) (Editing by James Davey; Editinmg by Mike Nesbit)

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