The Bradford-based chain said the like-for-like retail sales performance in the 10 weeks to January 7 came as it resisted hiking prices despite surging costs, with the price of a basket of key Christmas items the same as last year.
For the crucial six-week Christmas and New Year period, same-store retail sales picked up pace, rising by 2.8%, Morrisons said.
Including a 0.7% rise in wholesale trading, group like-for-like sales excluding fuel rose 2.8% over the 10 weeks, while online sales at Morrisons.com grew by more than 10%.
Morrisons kicks off the festive trading updates from the Big Four supermarkets with a better-than-expected set of numbers.
Analysts had pencilled in a 1.7% rise in group comparable sales.
David Potts, chief executive of Morrisons, said: "More and more customers found more things they wanted to buy at competitive prices at Morrisons this Christmas.
"Our plans to become a broader and stronger business are progressing well, with another period of positive like-for-like sales and the start of the rolling programme to supply McColl's."
Morrisons shares lifted as much as 4% after its trading update, sparking gains for rivals Sainsbury's and Tesco, up 3% and nearly 1% respectively.
Mr Potts said while the group kept the prices of key Christmas lines on hold, there was still some inflation across food.
But he said that was set to pass through over 2018, with prices of some produce, such as seafood, already coming down.
He added the group was "open for business" for new stores and plans to open a "handful" of new supermarkets a year, with around one or two set for the year ahead.
Morrisons also confirmed its wholesale deal with the McColl's convenience store chain would begin rolling out this week, with around an extra 25 to follow each week.
It started supplying some tobacco to McColl's earlier than planned, which helped push up wholesale sales in the 10 weeks to January 7.
Mr Potts has led a recovery of the grocery chain by investing in price cuts and calling time on under-performing stores in attempts to turn the page on the supermarket's ill-fated era under ousted boss Dalton Philips.
The McColl's deal - announced in August - is also part of his turnaround efforts and will see the group relaunch the Safeway brand.
The partnership will see the supermarket supply Safeway and branded products to 1,300 convenience shops and 350 newsagents.