The Bradford-based grocer has seen its first market share gains since 2011 and was the only one of the big four to see positive sales growth, according to the latest Kantar Worldpanel data.
Asda was the worst performer, but the Leeds-based grocer has vowed not to resort to giveaways, which have boosted sales at its rivals at the cost of profits.
Morrisons was boosted by its successful entry into online shopping and sales over the 12 weeks to June 21 rose 0.6 per cent, increasing its market share to 11.0 per cent from 10.9 per cent a year ago.
Kantar said that although this is a modest increase, it’s the first since December 2011.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said there is a very loyal core of Morrisons shoppers that admire the brand and what it stands for. This is the second month in a row that Morrisons has increased growth.
“Online sales are definitely helping Morrisons,” he said.
“It’s late to online and it still doesn’t have national coverage. However revenue doesn’t necessarily translate into profits - that remains to be seen.”
Asked whether the growth is sustainable, Mr McKevitt said: “Morrisons has a lot of room to grow the online business.”
Morrisons’ performance was in stark contrast to the UK’s second biggest grocer Asda, which suffered a 3.5 per cent decline.
Industry observers believe Asda has been given the go-ahead by its owner Wal-Mart, the world’s biggest retailer, to sacrifice sales as long as it maintains profits. This means it has refused to join in the vouchering promotions that it describes as giving money away.
“Asda certainly seem to be holding their nerve. They have deep pockets,” said Mr McKevitt.
“The figures aren’t as bad as Tesco was in 2014 with minus 4.5 per cent, but it’s not a great story for Asda as they don’t have the convenience stores.
“Asda are starting to lose market share. It’s not that shoppers are deserting them, it’s just there are a lot of other options with the discounters and Tesco cutting prices.”
Market leader Tesco and number three player Sainsbury’s both saw a 1.3 per cent fall in sales.
“Both have been helped by their convenience stores, but like Morrisons, their main stores are still struggling,” said Mr McKevitt.
Aldi and Lidl showed no signs of slowing down and are continuing to take share away from the competition.
Aldi has reached a new high with a 5.5 per cent share of the market after increasing sales by 15.4 per cent and Lidl stands at 3.9 per cent market share after increasing sales by 9.1 per cent.
“The discounters are maintaining their market growth rate,” said Mr McKevitt.
“We are not just hearing from Lidl about price, we are also hearing about quality. It’s starting to look more like a mainstream supermarket.”
Kantar said that groceries are now 1.7 per cent cheaper than last year.