Who'd have predicted Morrisons would be hailed the darling of the City? Yet that is exactly what has happened following a stonking sales uplift over Christmas that left its rivals trailing in its wake.

The analysts were fulsome in their praise for its 9.5% like-for-like sales growth - if somewhat surprised a week after the normally reliant Tesco posted a 3.1% like-for-like increase, and Sainsbury's 3.7%.

Marc Bolland puts its success down to a tactical "triangle" of advertising, promotion and availability. Though the Morrisons chief executive is reluctant to overplay the significance of the six-week trading figures, he is confident his "optimisation plan", launched last spring, will continue to drive up sales and profits.

If Christmas is anything to go by, his confidence looks well placed. During November, Morrisons spent £10.93m [Nielsen Media] on advertising slots, more than any of the other big four, though Tesco upped the stakes in December to spend most overall.

"Bolland's Heineken background shone through," says analyst Clive Black at Shore Capital. "His quality as a marketer showed in the effectiveness and execution of an advertising campaign that raised the profile of Morrisons, encouraging a lot of people to give them another visit."

Consequently, Morrisons stole market share from its rivals in the south and Scotland. With its marketing budget to be maintained at 2006/07 levels, Bolland reckons further inroads can be made. He also has a string of new celebrities up his sleeve to build on the work of Lulu, Denise van Outen and Alan Hansen promoting his "fresh food for everyone" message.

Another core ingredient of Morrisons' success was its promotions. "Promotional activity was much more apparent this year than last Christmas," says Black. "Morrisons also started earlier than most and stole a march on the competition."

In fact, heavy promotions on beers, wines and spirits started a week earlier. Morrisons also capitalised on its Griffith Park sparkling rosé making Effervescents du Monde's Top 10 Sparkling Wines in the World. On promotion for £4.99, the bubbly sold up to 50,000 units a week.

But though price cuts were deeper, they were fewer, says Bolland. Morrisons didn't buy sales at the expense of margins, he insists.

The third key element was execution. A newly invigorated head office trading team, finally free from the shackles of the Safeway integration, held daily morning meetings with regional managers to ensure everyone was prepared. This helped availability, which Bolland claims was better than anyone else's over Christmas.

That the supply chain held up under pressure bodes well for the planned IT upgrades. Morrisons' manual distribution centre picking systems are to be modernised over the next 12 to 18 months and it is also close to securing two new DCs in the south and south west.

Other improvements are on the way, promises Bolland. A major store refurbishment and rebranding programme is already well under way, as is its range reformulation programme.

Given the retailer's low price position, Morrisons looks set to ride any economic downturn and build on its festive success - if no-one throws a spanner in the works.

As Black says: "Morrisons' success will attract a more rapid response from competitors. It has changed the dynamic of trading behaviour. The waters will get rougher this year as competitors intensify their challenge."nchristmas stars

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