THE retail sector will be back in the spotlight next week with updates from key players covering the supermarket, department store and DIY markets.
While supermarket chain Morrisons delivered an impressive 8.2% rise in like-for-like in sales over Christmas, investors will be keen to see on Tuesday if any of the growth came at the expense of margins.
The group reported record levels of trade across its stores over the festive season, helped by its focus on fresh food and promotional offers.
The UK’s fourth biggest supermarket chain has completed the rebranding of its stores as part of a three-year turnaround plan led by chief executive Marc Bolland, following the problems caused by its takeover of Safeway in 2004.
It has also re-launched cheaper lines, slashed prices and launched promotions, including Sunday lunch for four for £4.
The company said its expectations for 2008/09 profits remained unchanged following the Christmas trading update.
Since then, the supermarket has continued its strong run by swelling its market share to 11.8% in the 12 weeks to February 22, from 11.6% the previous year, according to industry researchers TNS Worldpanel.
Credit Suisse analysts predicted the operating margin for the second half to be "very slightly down" year-on-year, with higher energy costs and aggressive promotions among the likely short-term causes.
They said in a note: "We think Morrisons still has considerable UK growth opportunity ahead and is ideally competitively placed in today’s tough trading environment as a value/food retailer."
The consensus forecast for underlying pre-tax profits is £627m, against £563m a year earlier.
Argos and Homebase owner Home Retail Group’s pre-close update on Wednesday is expected to deliver little cheer as retailers batten down the hatches for recession.
Two months ago the company announced more heavy like-for-like sales falls for both brands, with Argos 7.5% lower and Homebase down 10.2% in the 18 weeks to January 3.
Home, which rejoined the FTSE 100 Index in January, described the trading environment as turbulent, but it at least said cost savings left it on track for annual profits of around £320m.
.....
In nebusiness next week online and in print: We look at the murky world of crime in the virtual world and find out how you can protect your business from online fraud.
In Wednesday's commercial property special supplement Graeme King investigates the current investments trends in the North East market.
Thursday is science and technology day in The Journal and next week we report for the Newcastle Science Festival as well as bringing you the latest news from the science and tech world.
Log on to nebusiness.co.uk throughout the week for breaking regional and national news and to check out our new fantasy stocks and shares game if you haven't already.
