Bradford, northern England-based Morrisons has reported three years of underlying sales growth, but its shares fell as much as 4.8 percent on Tuesday after it missed analysts' forecasts for overall Christmas trading.

Traditionally, British consumers have traded-up to Britain's big four supermarket chains - market leader Tesco, Sainsbury's, Asda and Morrisons - as well as upmarket players Marks & Spencer and Waitrose [JLPLC.UL] in the run-up to Christmas.

However, that pattern has changed in recent years as German-owned Aldi and Lidl have invested heavily in, and promoted, premium lines.

Market researcher Kantar Worldpanel said two-thirds of all British households shopped at either Aldi or Lidl over the 12 weeks to Dec. 30, resulting in their highest-ever combined Christmas market share of 12.8 percent.

Kantar and rival researcher Nielsen both reported Walmart-owned Asda as the top Christmas performer among the big four, followed by Tesco and Morrisons and with Sainsbury's the laggard. However, all four lost market share to the discounters.

Shares in Tesco rose as much as 4.3 percent as its performance was perceived as solid. Tesco is due to report on Thursday and Sainsbury's on Wednesday.

On Monday, Aldi said December sales rose around 10 percent to almost 1 billion pounds.

The march of the discounters has forced the big four to reassess their strategies. They have cut prices and costs to better compete, while No. 2 Sainsbury's has proposed a 7.3 billion pound takeover of No. 3 Asda to increase buying power - a deal now being assessed by the competition regulator.

Morrisons and Tesco both launched another wave of price cuts on Monday.

TOUGH NOVEMBER

Morrisons said its like-for-like sales, excluding fuel, rose 3.6 percent in the nine weeks to Jan. 6 - below analysts' average forecast of 4.1 percent and growth in the previous quarter of 5.6 percent.

Retail sales its stores rose 0.6 percent, compared with 1.3 percent in the previous quarter, while wholesale sales rose 3 percent, compared with 4.3 percent in the quarter before.

In common with other UK retailers, Morrisons highlighted a change in consumer behaviour in November, amid uncertainty over whether Britain will agree a negotiated withdrawal from the European Union in less than three months' time.

"Going into November there was just a sense that customers were a bit more cautious," Morrisons Chief Executive David Potts told reporters.

"A feeling of uncertainty in the country may have led to some of that feeling," he said, referencing "the macro/political situation."

Britons have also had to cope with muted wage growth in recent years, forcing them to rethink the way they shop.

"Shoppers (are) now opting to spend less on doing one big shop; instead preferring more frequent, smaller trips to the supermarket, spreading the cost across multiple retailers to increase choice," said Mike Watkins, Nielsen’s UK head of retailer insight.

Morrisons did, however, stick to its expectations for its 2018-19 financial year ending Feb. 3. Prior to Tuesday's update, analysts were on average forecasting a 2018-19 pretax profit of 409 million pounds, up from 374 million in 2017-18.

With a disorderly Brexit a possibility, Potts said Morrisons had stepped-up preparations, working with freight firms and suppliers to check their state of readiness, particularly regarding potential disruption and delays at ports.

(Reporting by James Davey; Editing by Jane Merriman and Mark Potter)

By James Davey and Kate Holton