Morrisons and Debenhams surprise City with Christmas bounce back

Potts said: “We are seeing customers coming in asking where things are and that’s a clue they haven’t been there before. I witnessed that up and down the country.

“Some of our deals and marketing did attract more customers. We haven’t set out yet to welcome back customers to Morrisons… We need to make sure we’re right first. New customers are always willing to give stores a try.”

But despite the improvements, there was bad news for 680 staff as Potts said a further seven stores would close, in addition to the 20 shut last year.

Staff were told on Tuesday, and Potts said no more shops are planned for closure.

The branches to be closed were not revealed until staff had been informed, but Potts said they were all smaller stores of around 15,000 square feet.

Investors were pleased with the performance and sent shares up nearly 10%, rising 15.2p to 167.5p, although analysts pointed out that the Kantar market data showed Morrisons down 2.6% once closures and the convenience-store sell off is considered.

Over at Debenhams, outgoing chief executive Michael Sharp defied the market by revealing sales in the 19 weeks to January 9 rose 3.5% as he said the department store managed to avoid the pitfalls of the warm weather which affected rivals Marks & Spencer and Next.

He explained that the company focused more heavily on gift sales than in previous years, moving away from clothing. The retailer now sells fewer clothes than other goods.

Sharp added: “Over the course of the past few years we said we’d plan our sales more prudently with lower stock levels… That was about trying to make the business more flexible and we had less clothing stock than last year.”

It meant the retailer was not lumbered with too much warm clothing during one of the mildest Decembers on record.

Investors were impressed, with shares up 16%, or 10.55p to 76.55p.