Morrisons had been expected to post positive like-for-like sales during the Christmas trading period, but its consensus-busting performance took many by surprise.

The grocer unveiled a 2.9% jump in like-for-likes for the nine weeks to January 1, marking its strongest performance in seven years.

Morrisons’ impressive recovery under boss David Potts and finance chief Trevor Strain continues to gain momentum, but how did the former Tesco executives concoct a winning festive formula?

Retail Week runs the rule over the key areas that drove the Bradford-based grocer’s seasonal performance.

Enhancing the proposition

Morrisons relaunched its private label premium range, The Best, in the autumn, rolling out 470 lines.

For Christmas, the grocer added 100 festive SKUs, offering shoppers the opportunity to trade up without having to shop at upmarket rivals such as Waitrose or Marks & Spencer.

“Its festive ‘free from’ lines also flew off the shelves – sales doubled compared to the previous year’s comparable period”

Potts described The Best as “a game-changer for us this Christmas”. More than half of all baskets purchased during the nine-week period included at least one product from the premium range.

Morrisons also expanded its party food lines, selling 2.4m units in a category that Potts admitted the grocer had “not really done much” with before.

And its festive ‘free from’ lines also flew off the shelves – sales doubled compared to the previous year’s comparable period.

As a result of the broader product range, Potts concluded that Morrisons was “more things to more people” at Christmas.

Leveraging Nutmeg clothing

Away from its core food proposition, Morrisons also leveraged its Nutmeg fashion label to good effect during the crucial trading period.

“The breadth of choice was stronger across Christmas jumpers, t-shirts, nightwear and childrenswear”

Having installed a Nutmeg presence in each of its supermarkets by the year end, Morrisons’ own-label clothing revenues climbed more than 30% over the period, which included a record sales week for the brand.

Although the SKU count was similar to last year in terms of its festive lines, Potts said the breadth of choice was stronger across Christmas jumpers, t-shirts, nightwear and childrenswear, all of which gained traction with shoppers.

New designs and the allocation of more space to Nutmeg products meant the brand was shunted towards the front of consumers’ minds, resulting in surging sales.

Improving customer service

One of Potts’ key focuses since taking the Morrisons reins has been to improve customer service, and the grocer delivered on that front again when it mattered most.

The retailer said it had more checkouts open more often across the nine weeks, reducing queuing time at the tills.

Even more crucial was Morrisons’ adoption of a new sales-based automated ordering system, which improved availability across its stores.

Potts said the availability of “key” Christmas items was much-improved, as shelves remained fuller for longer in the build-up to the big day – and meant customer satisfaction levels remained strong.

Harnessing its Market Street offer

Building on its customer service drive, Morrisons gave greater prominence and importance to its Market Street offer over Christmas.

Making the most of its unique position in the market as both “food makers and shopkeepers”, the grocer used the expertise of its in-store butchers, bakers and fishmongers to good effect.

“Morrisons gave greater prominence and importance to its Market Street offer over Christmas”

“They provided customers with the service and advice they wanted,” Potts said.

“They are very highly valued by the company and massively valued by customers as well. They provide cooking advice, food preparation advice and help customers create food that people enjoy.”

At Christmas, that help and advice proved more valuable than ever.

Becoming more competitive on price

Having already ploughed investment into its rolling ‘Price Crunch’ campaign of discounts, Morrisons picked up that baton and ran with it during the festive period.

Potts hailed the grocer’s “very sharply priced” Christmas basket, helped by what he called “the knockout deal” of the festive season – three bags of British seasonal vegetables for £1.

On the back of the promotion on sprouts, parsnips, carrots, potatoes and onions, Morrisons sold 7,000 tonnes of vegetables during the nine-week period.

In addition to that, Morrisons The Best products were keenly priced in comparison to the equivalent premium ranges of its big four rivals.

“If you’ve got a premium brand that’s very well-priced, it means you can provide more of a customer’s shopping basket at a time when they want to trade up and treat their friends and family,” Potts said.

Winning back shoppers

As a result of the admirable work Potts and his team have put in over the past 18 months, Morrisons has begun to woo shoppers back – a trend that continued over Christmas.

Although it did not provide figures to illustrate how many customers it regained during the period, transaction volumes rose strongly, climbing 5.2%.

As footfall increased in its supermarkets, store like-for-likes grew 1.6%.

“’Two-thirds’ of Morrisons’ sales improvement during the quarter was achieved by serving more customers year-on-year”

Strain said “two-thirds” of Morrisons’ sales improvement during the quarter was achieved by serving more customers year-on-year.

Potts insisted his team “haven’t really stopped to consider where those customers are coming from,” but recognised the importance of increasing footfall across its stores.

“Busier stores tend to be contagious,” he said.

If Morrisons’ year of recovery and its festive fillip is anything to go by, Potts may well be right.