It looks like Morrisons has turned a corner

Struggling supermarket Morrisons was dumped out of the FTSE 100, the list of Britain's 100 biggest public companies, in December but it looks like it's finally back on the right track.

The retailer on Thursday put out a first-quarter trading update showing sales were up 0.7%, discounting the impact of closed shops or new openings.

It may not sound like much but in the context of how Morrisons has been faring it is real progress. Just look at this table of sales growth over the last year included in the update:

The supermarket has gone from a 2.9% decline in sales over three months to a 0.7% growth in just a year and it looks like growth is accelerating too. That's progress.

CEO David Potts says in Thursday's update:

We are encouraged by progress across our six priorities. There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can. Customers are responding and satisfaction levels remain ahead of last year. We are of course pleased with a second consecutive quarter of positive LFL sales, which demonstrates our aim to stabilise trade is taking effect.

Morrisons has been under pressure from discounters like Aldi and Lidl, which have sparked a price war and deflation in the supermarket sector. While Tesco, Sainsbury's and Asda - who together with Asda make up the so-called 'Big Four' - have also been battling these discounters, Morrisons has been at a particular disadvantage, lagging behind its traditional rivals in things like online shopping and convenience stores.

M Local - convenience stores first created by Morrison in 2011 as a competitor for Tesco Express and Sainsbury's Local - was a disaster for the company and Morrisons was forced to sell the 140 stores to private investors for just £25 million ($37.3 million) in September. All 140 of the stores were making a loss.

The future looks a little brighter when it comes to online groceries. Morrisons recently struck a supply deal with Amazon that means "hundreds of Morrisons products will be available to Amazon Prime Now and Amazon Pantry customers."

To get back to sales growth Morrisons has focused on simplifying and speeding up the business, it says in today's update. Morrisons highlights the success of its "Food to Go" range, up 17% on last year, and self-scan checkouts, which have speeded up paying.

The supermarket says it still expects more deflation in the grocery market but says: "Growing LFL [like-for-like sales] volume remains a key priority for every member of the Morrisons team."

NOW WATCH: THE STORY OF GOLDMAN SACHS: From foot peddlers to a powerhouse

Please enable Javascript to watch this video