Britain's Marks & Spencer is expected to report another fall in underlying sales in both clothing and food in its Christmas quarter, while the major grocers are forecast to show a slowdown in growth as the discounters march on.
For M&S, analysts are forecasting a 2.5 % drop in like-for-like food sales, partly reflecting management's moves to make the business more competitive by cutting prices. M&S will update on Thursday.
Analysts are also forecasting a fall of 1.6% in like-for-like clothing and homeware sales for its third quarter to 28 December, mirroring the previous quarter's decline.
After over a decade of failed turnaround programmes, the 135-year-old retailer is now targeting sustainable, profitable growth in three to five years by shutting 100 stores by 2022 as it strives to make at least a third of clothing and home sales online. In November it warned that sales were unlikely to improve any time soon.
Slowing Grocers
On Thursday Tesco, Britain's biggest retailer, will publish data for its third quarter to 24 November, as well as the six weeks to 5 January. Analysts forecast UK like-for-like sales growth of 0.5% to 1% for the third quarter, picking up to 1.0% to 1.5% for the latter period. Growth was 2.5% in the second quarter.
Sainsbury's, which in April agreed a £7.3 billion takeover of rival Asda, will on Wednesday update on trading in the third quarter to 5 January. Analysts are on average forecasting a like-for-like sales fall of 0.2% versus a 1% rise in the previous quarter.
Morrisons, the number four player, reports on the nine weeks to 6 January on Tuesday, with analysts forecasting retail like-for-like sales up 0.5%, versus growth of 1.3% in its third quarter.
A theme for the period will likely be a further shift in market share to the German owned discounters Aldi and Lidl. Aldi will report on Monday and industry data from market researcher Kantar Worldpanel on Tuesday will provide another guide to the big four's performance.
A raft of other UK retailers are also due to report next week, including struggling department store Debenhams, baker Greggs, discounter B&M, and Mothercare.
Low Expectations
Expectations for the UK retail sector going into Christmas were low after industry data showed the largest November drop in shopper numbers for a decade and Sports Direct and Primark issued downbeat comments about trading.
Analysts have highlighted a disconnect between supportive economic factors - with consumers' real earnings growing and employment levels high - and an apparent reluctance to spend, partly due to uncertainty over Britain's departure from the European Union at the end of March.
Britain's economic growth slowed to a crawl at the end of last year and the housing market is stalling, according to data published on Friday, less than three months before Brexit day.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
