* Strength in economically weaker north is a challenge
* Says like-for-like sales growth still ahead of market
* Can't see promotions rising more, may be deeper price cuts
* Not seeing signs of consumers trading up
(Adds CEO quotes, detail, background)
LONDON, Oct 12 (Reuters) - Britain's Wm Morrison Supermarkets is braced for a tough Christmas, with its heartlands in the north of the country showing more economic strain than the south, its chief executive said on Tuesday.
"People say the British are going to go out and have a great Christmas irrespective (of tax rises and public spending cuts)," Dalton Philips told reporters on the sidelines of the annual conference of grocery industry group IGD.
"I'm not so sure. I think they're going to save," he said, striking a more cautious tone than executives at rivals Tesco and J Sainsbury, who earlier said they were optimistic of a good Christmas.
"We're a business that's more exposed to the north (of Britain). That's obviously a challenge to us. London is a market that's bouncing back relatively strongly," Philips said.
"Our average customer now has close to 100 pounds ($159) less in their pocket (per month) than they did a year ago," he added, pointing to pressures on household budgets like higher petrol prices.
Sainsbury said last week it had overtaken Morrison to become the fastest-growing of Britain's top four supermarket groups.
However, Philips said Morrison was still growing like-for-like sales ahead of the broader grocery market and was confident it would continue to perform well against rivals.
"We've won Christmas four years in a row in terms of (market) share. We intend to win it for a fifth," he said.
He declined to discuss Morrison's Christmas trading strategy, but said he did not think the rate of promotions in the grocery industry would rise much beyind their current record levels.
"I think you're just going to see deeper cuts (in prices). Maybe it'll get tighter and deeper as opposed to broader," he said.
Philips said Morrison's was seeing no sign of shoppers trading up to more expensive products -- a phenomenon noted by Tesco last week.
He also said the group would look at stores that rival Asda will have to sell in order to win regulatory approval for its purchase of Netto UK, but added they were not a big focus. (Reporting by Mark Potter; Editing by Michael Shields)