LONDON (Reuters) - Morrisons (>> WM Morrison Supermarkets PLC), Britain's fourth-biggest supermarket chain, kept its recovery on track with a fourth straight quarter of underlying sales growth, helped by a record Halloween, more price cuts and the launch of a premium range.

Former Tesco (>> Tesco PLC) executive David Potts joined Morrisons as CEO in March 2015 with a remit to revive the group after it was hammered by the rapid rise of discounters Aldi and Lidl in its northern England heartland.

He has reversed a loss of customers by cutting prices, improving product quality and availability and bolstering store standards and customer service, delivering a 53 percent rise in the firm's shares so far this year.

"We feel we have reconnected with our core customer base," Potts told reporters on Thursday.

Morrisons, based in the northern city of Bradford, reported a 1.6 percent rise in third-quarter sales at stores open more than a year and excluding fuel, its second best quarterly performance in five years.

The growth in sales for the 13 weeks to Oct. 30 topped analysts' forecasts of 1.0 to 1.5 percent, though it slowed from the second-quarter's 2.0 percent.

Morrisons, which is focusing more on key seasons and events, enjoyed its biggest ever Halloween, with sales up about 20 percent year-on-year. It sold more than 1 million pumpkins and 140,000 costumes.

The company also introduced "The Best" premium range, with hundreds of products launched and more planned in the run-up to Christmas.

Overall like-for-like transactions rose 4.1 percent in the quarter, while deflation was 1.0 percent, reflecting price cuts in fruit, vegetables and cooked meats.

Last week, however, Morrisons did raise the price of Marmite by 12 percent, passing on an increase sought by its maker Unilever (>> Unilever plc) that led to a row with Tesco over who should take the hit from the fall in the pound since June's Brexit vote.

Potts said that while prices of some Unilever goods had gone up since June, prices on as many of the supplier's products had gone down in Morrisons stores.

Though Morrisons is up against tougher comparative numbers for its fourth quarter, Potts was optimistic.

"Regardless of the comparables, if you can't get stuck into Christmas and New Year in this business you're in the wrong business," he said. "We have a good plan - it's been written by customers."

Potts has also overhauled Morrisons' online strategy through a renegotiated agreement with distributor Ocado (>> Ocado Group PLC) and a wholesale supply deal with Amazon (>> Amazon.com, Inc.). Online sales contributed 0.9 percent to the like-for-like sales growth in the third quarter.

Some analysts believe Morrisons is better positioned than rivals Tesco, Sainsbury's (>> J Sainsbury plc) and Asda (>> Wal-Mart Stores, Inc.) in the post-Brexit vote environment because it has a stronger balance sheet, sells fewer non-food products and makes half of the own brand and fresh food it sells, making it less exposed to currency pressures.

Others caution Morrisons could be vulnerable to a fight back by sector laggard Asda.

Analysts on average forecast Morrisons will achieve a 2016-17 underlying pretax profit of 321 million pounds, up from 302 million in 2015-16. Finance chief Trevor Strain said he was comfortable with forecasts.

(Editing by Sarah Young and David Clarke)

By James Davey