The Bradford-based supermarket reported a 0.2% rise in like-for-like sales excluding fuel in the nine weeks to 3 January in a marked turnaround after recent hefty sales declines.
Morrisons chief executive, David Potts, said: "We are pleased with our improved trading performance over the Christmas period.
"While there is of course much more to do, we are making important progress in improving all aspects of the shopping trip."
The group said it was "beginning to attract customers back" as the Christmas performance marked its first rise in sales in around four years and confounds expectations of a sharp fall.
It follows a 2.6% drop in the previous three months and comes after a disappointing performance last year, when sales fell 3.1%.
Morrisons notched up the sales increase despite further falls in prices - down 3.2% excluding fuel over the period - as this was offset by a significant rise in sales by volume.
It added that the number of transactions rose 1.3% on a like-for-like basis.
Figures for the six weeks to 3 January showed an even better performance, with comparable sales up 0.5%.
But Morrisons said it would close another seven stores, following its announcement last September that it was shutting 11 stores, putting 900 jobs at risk.
It also agreed the sale of 140 M local convenience stores last September for around £25 million to concentrate on its larger supermarkets.
Around 680 jobs are under threat from the latest store closures.
Morrisons said it was shutting the branches "with regret", but stressed they were not profit- making and were among its smaller outlets, at under 15,000 sq ft.
It will have around 490 stores after the closures.
Shares in Morrisons surged by more than 10% after the better-than-expected trading update, while the cheery start to festive trading from the Big Four players sparked gains across its listed rivals, with Tesco and Sainsbury's up 6% and 4% respectively.
Analysts were expecting sales to fall by 2% at Morrisons, coming against a tough backdrop in the supermarket sector as the major players have been waging a fierce price war in the face of competition from discounters Aldi and Lidl.
Upmarket rival Waitrose last week posted a 1.4% drop in sales over its six-week festive season, although Marks & Spencer's food halls fared better with a 0.4% rise over the quarter to 26 December.
Morrisons said its overall sales rise came mainly after an improvement from its core stores, although online sales contributed 0.9% to the nine-week growth.
Strong sales of beer and wine helped Morrisons notch up its festive sales increase, while it added that its Nutmeg clothing range fared well, as did its M Signature premium food range.
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