After today’s stronger than expected Christmas trading update from William Morrison Supermarkets PLC (LON:MRW), Britain’s number two food retailer, J Sainsbury plc (LON:SBRY) will update the market tomorrow.
Sainsbury has continued to be a laggard in the sector, with the latest till roll data from Kantar Worldpanel released today showing its sales declining by 0.1%, while those for market leader Tesco grew by 1.3%.
Analysts at Barclays expect Sainsbury to deliver a like-for-like sales decline of 1% for the quarter including Christmas.
READ: Tesco fastest Christmas sales growth ...
In a preview to clients, the analysts said: “Sainsbury does not face especially tough comps from the previous Christmas; however, this was in part a reflection of very strong comps in December 2014.
They added: “We are fundamentally a little more wary about the underlying strength of Sainsbury’s Christmas trading performance given our expectation of particularly good execution from Tesco and Morrison.
“Furthermore, Sainsbury’s decision to virtually eliminate multibuy promotions may be more painful to the sales line at this high-volume time of year.”
However, investors will be most keen to see any signs of the early effects of Sainsbury’s £1.4bn acquisition of Argos-owner, Home Retail Group, which completed in September.
The firm has been trialling the positioning of catalogue-based Argos outlets in Sainsbury’s stores, and the success of this and its increased exposure to non-food markets will be closely watched by the markets.
More clothing retailers ...
Elsewhere on the high street, fashion firm Ted Baker PLC (LON:TED) will also release a Christmas trading update tomorrow.
Panmure Gordon expects the company to announce a +15.0% jump in total retail sales on a reported basis and a +6.5% increase in retail sales on a constant exchange rate basis for the 8 weeks to January 7.
In a preview, the broker predicted an +8.5% increase in average square footage and a +35.0% jump in Ecommerce sales.
And clothing and homeware brand Joules PLC, which listed on AIM last May, should have enjoyed a strong winter season already, according to Peel Hunt, which gives it confidence in a positive January update.
In a preview note to clients, the broker said: “Black Friday was well executed and Joules has a programme of events to focus on gifting in the build-up to Christmas.“
Joules reported strong group sales growth of 16.2% for the six months to November 27.
More constructive ...
Away from retail, housebuilders will also be back in the headlights Thursday, with Taylor Wimpey PLC (LON:TW.) set to continue the sector updates.
Analysts at Peel Hunt are forecasting revenue growth from Taylor Wimpey of 13%, split between around 5% growth in sales volumes and about 8% growth in prices.
In a preview to clients, they said: “After a good period of trading through the Autumn, we expect the group to enter 2017 with a strong forward order book.
“It is well placed to drive further modest gains (c3-4%) in volumes in 2017, and the pull through of good margin land should show improvements in the operating margin.”
Significant announcements expected on Wednesday …
Finals: ShoeZone PLC (LON:SHOE)
Trading updates: J Sainsbury plc (LON:SBRY), Joules Group PLC (LON:JOUL),Taylor Wimpey PLC (LON:TW.),Ted Baker PLC (LON:TED), McBride plc (LON:MCB), PageGroup PLC (LON:PAGE), Tullow Oil plc (LON:TLW), Cineworld PLC (LON:CINE)