UK grocer Morrisons posts rare sales rise - Kantar

(Adds further details, table of data)

LONDON, June 2 (Reuters) - Morrisons, Britain's

fourth-biggest supermarket operator, increased its quarterly

sales for the first time since December 2013 and outperformed

its other 'big four' rivals, who all suffered falls in a market

hit by a price war and deflation, according to new industry

data.

New (KOSDAQ: 160550.KQ - news) boss David Potts, a former top executive at market

leader Tesco (Xetra: 852647 - news) who joined Morrisons in March, saw sales

rise 0.1 percent in the 12 weeks to May 24, market researcher

Kantar Worldpanel said.

Tesco, Sainsbury's, and Asda have, like

Morrisons, been cutting prices and revamping stores in an effort

to attract shoppers lost to discount rivals Aldi and

Lidl but saw their sales in the same period fall 1.3,

0.3 and 2.4 percent respectively.

Aldi and Lidl recorded sales growth of 15.7 percent and 8.8

percent, Kantar said, with Lidl's market share now at a record

3.9 percent. Tesco's market share fell 0.4 percentage points in

the period.

"A committed core of loyal Morrisons consumers is responding

positively to recent initiatives and business has been boosted

by online sales," said Fraser McKevitt, Kantar's head of retail

and consumer insight.

"Morrisons' performance is an improvement on what was a

difficult May, 2014, so this is only the first step in any

future recovery."

Kantar noted that all of the major supermarkets are finding

growth difficult as prices have been declining since Sept. 2014.

Yet while like-for-like groceries were 1.9 percent cheaper

than this time last year this was not as steep a fall as last

month, when prices were down by 2.1 percent.

This means that if current trends continue prices will start

rising again by the end of the year, Kantar said.

Overall the UK grocery market recorded sales growth of 0.2

percent in the period.

The boost to Morrisons comes as the firm faces relegation

from Britain's FTSE 100 share index in Wednesday's

quarterly reshuffle.

Morrisons' share price, down 14.4 percent over the last year

was up 0.4 percent at 170.2 pence at 0953 GMT.

Potts will face Morrisons' shareholders for the first time

at Thursday's annual meeting, where the board is expected to

face criticism over a 3 million-pound ($4.6 million) pay-off

made to Dalton Philips, who was sacked as chief executive in

January.

Market share and sales (percentages)

12 weeks to 12 weeks to pct change

May 24 2015 May 25 2014 in sales

Tesco 28.6 29.0 -1.3

Asda 16.6 17.1 -2.4

Sainsbury 16.5 16.5 -0.3

Morrison 10.9 10.9 0.1

Co-operative 6.0 6.0 -0.7

Waitrose 5.2 5.1 1.6

Aldi 5.4 4.7 15.7

Lidl 3.9 3.6 8.8

Iceland 2.1 2.0 1.9

($1 = 0.6557 pounds)

(Reporting by Neil Maidment and James Davey; Editing by Greg

Mahlich)