The Week Ahead: Retailers to paint mixed picture of high street

Click to follow
The Independent Online

Results and updates from four leading retailers this week should provide further clues about the extent of the consumer spending slowdown that threatens Gordon Brown's economic forecasts. The statements are also an opportunity to spot winners and losers in the fierce battle for customers that continues to rage in the retail sector.

Results and updates from four leading retailers this week should provide further clues about the extent of the consumer spending slowdown that threatens Gordon Brown's economic forecasts. The statements are also an opportunity to spot winners and losers in the fierce battle for customers that continues to rage in the retail sector.

On Wednesday, J Sainsbury will tell shareholders whether it is making any progress in wresting back the initiative from its giant supermarket rival Tesco. The chief executive Justin King must show investors that the company's declining profitability has bottomed out.

News last week that Asda, the market No 2, has been missing sales targets has buoyed expectations. It follows data published last month by Taylor Nelson Sofres which showed Sainsbury's sales are growing faster than Asda's for the first time in a decade.

Also on Wednesday, Next will give a trading update at its annual meeting. The company is even more exposed to the consumer slowdown than the big supermarkets, and has already warned that sales were down 3.5 per cent over the seven weeks to 20 March. More happily, there are signs Next is doing well against Marks & Spencer, especially on menswear and homewares.

The best hope of good news at Boots on Thursday is positive developments in the company's proposed sale of its BHI health subsidiary, which could raise as much as £1.1bn. Bid speculation surrounding Boots as a whole has subsided in recent weeks, with investors still digesting the most recent depressing trading statement. Mothercare's results on Thursday are potentially a more positive story - the company received free publicity last month when the model Jordan was photographed shopping in one store. Even better, Mothercare's most recent trading statement suggested its specialism had enabled it to buck the general decline in high street sales.

TODAY: Legal tussles have dominated newsflow from Cambridge Antibody Technology, but the broker Cannacord says: "CAT has a significant intellectual property portfolio, employs world-class scientists and has garnered multiple partnerships."

Results: Full-year - DCC, Freeplay Energy, Robert Wiseman Dairies, PD Ports. Interims - Cambridge Antibody, Gaming Corporation, RM.

TOMORROW: BAA is expected to give an update on the construction of Terminal 5 at Heathrow, which is nearing completion. Analysts are anxious to see the company keeping a tight grip on costs, amid regulatory uncertainty. BAA has conceded defeat in its dispute with Ryanair over fuel costs and it is limited in the landing charges increases it may make before 2008, other than at Heathrow.

Enterprise Inns is on course to report a 40 per cent increase in earnings for its first half, reflecting the integration of the Unique pub estate into the company. Enterprise has already said it is considering dividend increases.

Results: Full-year - BAA, Business Post, Land Securities, Marconi, Viridian, VT Group, Yell. Interims - Abacus, Connaught, Enodis, Enterprise Inns, SCS Upholstery, Slimma. First quarter - Schroders. AGM - Greggs, William Hill.

WEDNESDAY: Investors in O 2 and Scottish & Southern Energy are keenly awaiting dividend news. O 2 gave an upbeat trading statement last month, but has yet to announce the size of its first-ever dividend. Scottish & Southern, meanwhile, has a strong balance sheet and in a favourable operating environment.

Results: Full-year - 0 2, Sainsbury, Scottish & Southern Energy. Interim - Compass, Fulcrum Pharma, Holidaybreak, Ultraframe. AGM - Beattie, Next.

THURSDAY: BT continues to grow sales in a competitive environment, particularly for voice calls. The key for the company is to improve returns from the newer parts of its business while cutting costs in traditional markets.

National Grid Transco, another privatisation giant, is on target for an increase in profits to £1.47bn, Williams de Broe estimates, despite its US exposure to the weak dollar. The company may be able to give further details of its plans to dispose of local gas distribution networks next month.

Results: Full-year - Boots, BPB, BT, Invensys, Investec, London Stock Exchange, Luminar, Mothercare, National Grid Transco, Petards, SABMiller, Synergy Healthcare, United Utilities. Interims - Avon Rubber, Jelf, Mitchells & Butler, Scottish Radio. First quarter - Tomkins. AGM - Cadbury Schweppes, Floors 2 Go, MFI.

FRIDAY: Wolverhampton & Dudley's March trading statement reflected the consumer spending slowdown and sales growth may have slowed further since then. The company will give an update on its plans for Jennings, the brewer it has just bought.

Results: Full-year - Castings. Interim - Wolverhampton & Dudley. AGM - Hilton.

Economics Diary

TODAY: UK - Speech by MPC's Marian Bell; Japan - Current account (Mar); Italy - Inflation (Apr); US - Empire State manufacturing survey (May).

TOMORROW: UK - Rics house price survey (Apr); UK - Inflation (UK); UK - Queen's Speech; UK - speech by Bank of England Governor Mervyn King; UK - Speech by Gordon Brown; Japan - GDP (preliminary) Q1; Japan - Industrial production (final).

WEDNESDAY: UK - Unemployment (Apr); UK - Average earnings (Mar); UK - MPC minutes (May); UK - Speech by MPC's Andrew Large; US - Inflation (Apr).

THURSDAY: UK - Retail sales (Apr); Eurozone - inflation (Apr); Eurozone - Industrial production (Mar); US - Alan Greenspan speech on housing and the economy.

FRIDAY: UK - Public finances (Apr); UK - Building society commitments (Apr); ECB President Trichet speaks at IMF forum.

Comments