WM MORRISON will emerge as the best-performing supermarket chain over the festive period when it unveils a bumper 7%-8% rise for Christmas sales in a trading update this week.

The Bradford-based chain is tipped to release like-for-like sales figures at the top end of City forecasts, trumping the growth recorded by rivals J Sainsbury, Tesco and Asda.

Tesco’s like-for-like sales excluding petrol increased only 2.5% in the six weeks to January 3 — its lowest rise in Christmas sales since 1993.

Sainsbury reported its best trading figures over the period, with like-for-like sales up a better-than-expected 4.5% in the 13 weeks to January 3. Asda did not release detailed Christmas figures, but hinted its growth would pass 6.9%.

Morrisons’ performance will be regarded as all the more impressive after a 9.5% rise in like-for-like sales the previous Christmas.

Data from market researcher TNS Worldpanel showed that Morrisons was the fastest-growing UK food retailer in the run-up to Christmas.

It said Morrisons’ sales rose by 9.7% in the 12 weeks to December 28 against the comparable period last year, outperforming a grocery market growing by 6%.

Supermarket analysts said they expected Morrisons’ “Market Street” — a fresh-produce aisle, selling vegetables, fruit, fish, meat, bread and cakes — to be a star performer, along with its premium organic lines and a discount range.

Under the stewardship of former Heineken executive Marc Bolland, Morrisons has defied City critics by wresting market share from rivals despite lacking an online grocery business or a big non-food range.

This year the group is expected to embark on its biggest expansion programme since the acquisition of Safeway in 2003. The company is tipped to open at least 46 new stores — including 38 it has agreed to buy from Somerfield, provided the deal gets regulatory clearance from the Office of Fair Trading.

It is also expected to open at least eight new shops which will form part of an estimated £1 billion package of capital investment in the business this year.

Analysts said the expenditure was sensible, taking a medium to long-term view, because where Morrisons has opened new stores it has often taken market share from rivals in the area.

Despite the upbeat news, analysts expect Bolland to strike a cautious note on the outlook for 2009.

They believe it will impossible for him to replicate the strong like-for- like sales growth notched up during the past two years in the current trading environment.

Rising unemployment will force customers to rein in spending, but Morrisons, which is thought of as a value player with low prices, will inevitably stress it is well-placed to weather the downturn compared with more upmarket rivals.

Separately, Asos, the online fashion retailer, is expected to report strong Christmas sales tomorrow. But gloomier news is expected from Kesa, the electricals group that owns Comet. It is expected to report a steep single-digit drop in like-for-like sales over Christmas after consumers put off buying big-ticket electrical items such as fridges and washing machines.

Last week DSG, owner of Currys and PC World, revealed a 10% drop in quarterly sales over Christmas. John Allan, the former boss of Exel, the distribution company, was reported last night to be on the verge of joining DSG as its new chairman, replacing Sir John Collins, who is due to retire this year.

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