Morrison's hot, but Iceland feels the chill

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The Independent Online

William Morrison, the Bradford-based supermarket group, confirmed its standing as one of the best performers in its sector yesterday as it announced record breaking Christmas sales figures. In sharp contrast, the Iceland frozen food chain reported a 4 per cent drop in underlying sales as the stores cut back on special offers.

Sales at Morrisons in the six weeks to 6 January were up by 7.2 per cent on the same period last year, if new stores are excluded.

Average weekly transactions rose by 5.4 per cent as shoppers warmed to the group's keen prices.

Celebrating his fiftieth Christmas at the company, Sir Kenneth Morrison, chairman, dismissed concerns that the growth was not sustainable. "I think we're pretty confident that we can keep the pace going," he said.

"We're very much food-oriented and so more protected from any slowdown."

The shares fell 3.5p to 196.5p.

However, Iceland shares fell 10p to 160p as the group warned that it would miss its target of flat full-year sales, after a sharp reduction in trade over Christmas.

The company said it would meet its profit expectations for the year to 31 March. Its decision not to repeat the special offers it had made the previous Christmas led to higher margins and increased customer spending, which compensated for the drop in sales.

In the five weeks to 4 January, like for like sales at the group were down by 0.8 per cent, including the Booker cash & carry chain.

Underlying sales at the core Iceland chain were down 4.2 per cent.