Wm Morrison plc (MRWSY) stock gained in early Thursday trading in London after sales growth gathered pace in the first quarter for Britain's fourth-largest supermarket.
Morrisons, as it is known, shrugged off inflation to see group like-for-like sales including fuel up 6.3% and total group sales increase to 2.8% excluding fuel in the 13 weeks ending April 30. Same-store sales, the group said, rose 3.4%.
"There was some inflation during the period, as imported food prices were affected by lower sterling," Morrisons said. "Irrespective of these external pressures, we remain focused on the journey towards a Morrisons price list and becoming more competitive for customers."
Morrisons shares rose 1.3% at the opening bell to trade at 242.10 pence each extending a 1.08% gain over the past three months.
"We are confident we will continue to turnaround and grow Morrisons. Our expectations and guidance for 2017/18 are unchanged, including year-end net debt of less than £1 billion," CEO David Potts said in a statement.
Morrisons saw its first growth in like-for-like sales and underlying profit for more than five years in 2016. Pre-tax profits on a reported basis were measured at £325 million, Morrisons said, a 49.8% increase from 2015 and its first profit since 2011.
U.K. grocery market share data from Kantar Worldpanel show Morrisons saw the biggest growth of the U.K.'s big four supermarkets, which also include Tesco (TSCDY) , Sainsbury's (JSAIY) and Walmart's (WMT) - Get Report Asda, with sales up 2.2% to £2.8 billion. However, Morrison's market share fell to 10.4% in the 12-week period to April 23 from 10.6%.
British supermarkets are beginning to feel the pressure from rising inflation, which is squeezing disposable income. Inflation for March came 2.3%, according the Office for National Statistics, unchanged from the February figure, however there are expectations that the April number could come in higher on May 16 due to the timing of Easter.
Sainsbury's (JSAIY) , the U.K.'s No. 2 grocery story, on Wednesday warned that slowing consumer confidence and a squeeze on real pay growth were beginning to impact non-food sales.