Morrisons has posted stronger than expected first-quarter sales but still said it remained “cautious” about the year ahead given the drop in shoppers’ disposable incomes.

Like-for-like sales excluding fuel increased by 2.5% from a year ago in the 13 weeks to 1 May, beating forecasts.

The retailer’s Biggest Ever Price Crunch promotion at the start of the year boosted trade, as did its Fuel Britannia and Let’s Celebrate campaigns around Easter and the Royal Wedding.

Chief executive Dalton Philips praised his team for judging the mood of the nation correctly over the quarter.

“In January and February people were worried about their budgets and wanted to save so we had the Biggest Ever Price Crunch," he said. “But over the past few weeks people wanted to get out and party and we got our offer spot-on.”

Philips said the Thursdays before Easter and the Royal Wedding were the second and third biggest trading days in the past six months – almost pipping 23 December, traditionally the biggest day of the year.

Morrisons credited its “encouraging start” to its new financial year to its “unique fresh and quality offer, backed by value pricing and an outstanding and innovative promotional programme.”

The supermarket blamed high oil prices and commodity price hikes for the pressures on shoppers' disposable incomes.

Read more
Saturday Essay: Is Morrisons the new trailblazer in grocery? (16 April 2011)
Dalton Philips Q&A: 'There is a real opportunity to romance the customer more' (26 March 2011)