WILLIAM MORRISON will step up the pressure on its major supermarket rivals on Thursday when chief executive Marc Bolland will disclose that the group is firmly on course to boost sales by as much as £1 billion this year.

The UK's fourth-biggest operator is expected to show its bigger competitors at Tesco and Sainsbury, in particular, a clean pair of heels with news that underlying grocery sales surged by around 7% in its latest quarter, rising to more than 10% if petrol is included.

Its Scottish operations put in a particularly strong showing, with customer numbers swollen by more than 10% following recent store openings in Erskine, Johnstone, Giffnock and Dundee.

The group now has 51 stores on this side of the Border, employing some 12,700 people, and has also gained from the fact that much of its produce is sourced locally from the likes of Bells Bakers, AG Barr, Gowrie Growers, Baxters and Strathmore Foods.

But the major factor has been its concentration on "Price Crunch" value- for-money promotions, helped by a near 30% rise in its advertising budget to cover TV fees charged by Denise van Outen, Alan Hansen, Helen Baxendale and others. Top Gear presenter Richard Hammond alone is said to have picked up £750,000 from four days' work.

This has helped it increase its overall market share at a time when others are feeling the pinch from the fast growth of discount chains such as Aldi, Lidl and Glasgow's Farmfoods.

Morrisons' drive for sales through special promotions, though, has attracted critics. The National Consumer Council recently placed it in last place among eight supermarket chains ranked for health items such as the quality of promotions, customer advice and food labelling.

Morrisons says the NCC findings were at least six months out of date and that it has taken steps to promote a healthier lifestyle.

Others point out that the underlying increase in sales is not that special at a time of rampant price inflation, with government figures showing that food prices have risen by an average of 12.2% in the past year and much more than that in some cases.

Analyst Freddie George at Seymour Pierce says that Morrisons' overall sales performance has also gained because it has only a small presence in tougher markets for non-food items, which account for just 5% of the business.

"That gives it a short-term advantage over the others but it does not have an internet offering or overseas stores either which could make the comparatives against Tesco and the others more difficult in the longer term," he cautions.

Justin Scarborough and the team at RBS believe that total sales may have jumped from £6.01bn to £6.72bn in the opening half-year and look for an 18% lift in profits before tax to £264 million. The figures could be accompanied by a 20% lift in the dividend payment.

The RBS brokers say full-year sales should rise from £12.96bn to just over £14bn and predict a 13% lift in full-year profits to around £635m, slightly above most other forecasts.

Despite the growth prospects, only five out of 13 stockbroking firms polled by Hemscott rate the shares a "buy" at current levels because of fears that profit margins will have to suffer as consumers step up their belt-tightening in coming months.

Any further fall in the share price from current levels of around 282p, though, could see directors step up their share buyback programme.

They said originally that they would buy in £500m shares in both the current financial year and in 2009 but have spent less than £50m in the past six months.