Morrisons and Debenhams rise off the floor as sales improve over Christmas

Despite the improvements, the supermarket's chief executive David Potts said a further seven stores would close, in addition to the 20 shut last year

David Potts, chief executive of Morrisons (Reuters)

Two of retail’s biggest strugglers managed to pull themselves into shape at Christmas by winning over customers and beating the bears who said the weather would hammer their sales.

Shares in Morrisons and Debenhams, which have both had their high street futures questioned in recent years, soared as sales rises defied fears that their rivals would push them closer to the brink.

The supermarket boosted its performance at the tills for the first time in four years, with the chief executive David Potts explaining he had cut back on store promotions, offered fewer multi-buy deals and improved pricing. That left like-for-like sales up 0.2 per cent in the nine weeks to 3 January – although 0.9 per cent of the rise came from Morrisons’ online operation.

Mr Potts said: “We are seeing customers coming in asking where things are, and that’s a clue they haven’t been there before. I witnessed that up and down the country. Some of our deals and marketing did attract more customers.

“We haven’t set out yet to welcome back customers to Morrisons and we might look at that in 2016, but we need to make sure we’re right before doing that. New customers are always willing to give stores a try.”

Despite the improvements, there was bad news for 680 employees as Mr Potts said a further seven stores would close, in addition to the 20 shut last year. Staff were informed, and Mr Potts said no more shops are earmarked for closure.

The sites that are being shut were not revealed until staff had been informed, but Mr Potts said they were all typically smaller stores of around 15,000 sq ft.

Investors were pleased with the sales performance and sent the shares up 13.2p or 9 per cent to 165.5p, although analysts pointed out that the Kantar Worldpanel market data showed sales were down 2.6 per cent once closures and the sell-off of convenience stores sell last year were taken into account.

At Debenhams, the outgoing chief executive Michael Sharp also defied the market by revealing that sales in the 19 weeks to 9 January rose by 3.5 per cent. The department store, he said, had not suffered from the warm weather in the same way as its rivals Marks & Spencer and Next.

He explained that the company had focused more heavily on gift sales than in previous years, moving away from clothing. This meant the split moved from 50-50 to 55-45 in favour of non-clothes.

Mr Sharp added: “Over the course of the last few years we said we’d plan our sales more prudently with lower stock levels… That was about trying to make the business more flexible and we had less... clothing stock than last year.”

That meant the retailer did not have too much warm clothing during one of the hottest Decembers on record. The shares jumped 16 per cent or 10.5p to 76.5p.