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Supermarket group WM Morrison has reported higher sales, with the retailer stressing its new ad campaign has been "very well received" by customers.

The company, whose latest advertising drive features celebrities such as 1960s singer Lulu and TV presenter Denise van Outen, said it had made an "encouraging" start to the second-half of the year – with like-for-like sales up and new stores opening.

Morrison, the smallest of the UK's four main grocery chains, said its like-for-like sales – excluding fuel - increased by 3.7 per cent in the 14 weeks to November 4th.

The growth represents a slight improvement on the three per cent increase in similar like-for-like sales reported by the retailer for the first seven weeks of the second-half.

Morrison said despite well-publicised pressures on commodity prices, it had cut the price of a further 7,500 products.

Meanwhile the company, which acquired former competitor Safeway in 2004, stressed it was "progressing well" with the implementation of its optimisation plan.

Morrison added the roll-out of its new branding was underway and on track for completion by the end of July 2008, with its increased marketing activity supporting the changes.

Commenting on the results, Morrison chief executive Marc Bolland said: "Although we are still at an early stage in our three-year optimisation plan, I am delighted with the progress that has been made.

"We are on track to deliver our vision of being the food specialist for everyone," he added.

Nonetheless, Morrison has joined other retailers in warning the market is expected to remain "competitive" over the coming period.

As such the company stressed it continued to be "cautious" about the outlook for consumer spending.