The Week Ahead: Tesco feels the pinch as shoppers are squeezed

After the former started its £500m price war last week, Tesco and Sainsbury's go head-to-head again on Wednesday when both update the market.

It has certainly been a tough period for the supermarkets, with shoppers' wallets increasingly squeezed, and as a result there is plenty of pessimism over the numbers from the UK.

Excluding fuel, Shore Capital is predicting Tesco will see its like-for-like sales for the first-half of the year fall 1 per cent, with a disappointing performance from its non-food offerings thanks not only to consumer pressures but also because of "competitive inadequacies".

The broker's analysts do, however, feel it will have "broadly held its own in the grocery aisles" despite the food industry suffering negative volumes for most of the year, which they describe as "unprecedented in modern times".

Outside the UK, they believe Tesco will announce a rise in first-half profits in Asia and Europe of 12 per cent and 13 per cent respectively, while they will also be looking for its Fresh & Easy business in the US to show "the first steps" towards breaking even.

Panmure Gordon's Philip Dorgan, meanwhile, expects Sainsbury's to have had rather a better time of it domestically, saying the company's second-quarter will have been "decent".

Forecasting the company's like-for-like sales to be up nearly 2 per cent, the same as for the first three months of the year, Mr Dorgan says fears "of underperformance over the summer should therefore be laid to rest".

In terms of the longer-term danger from Tesco's new aggressive pricing strategy, he warns it will "certainly result in some margin investment" but adds that "most of the pain will be felt outside the UK quoted sector and at [online grocer] Ocado".


Given the disappointing update from its peer Premier Farnell nearly a month ago, optimism is not high ahead of today's trading update from Electrocomponents. Saying that recent poor PMI data paints "a grim picture of the outlook across the board", Peel Hunt warns the electronic parts distributor "will likely be finding it tough" and that "with a tough outlook, low visibility and an operationally geared business model, we see no near-term catalysts for share price performance".

Results/Updates: Electrocomponents.


Results/Updates: Carillion and Wolseley.


Wood Group releases its interim management statement, the first time it has updated the market since being relegated to the FTSE 250 in last month's reshuffle of the indices. Numis Securities' Sanjeev Bahl says the energy services provider will reveal its engineering unit has continued to see a recovery in revenues and margins, while he believes there will be "visible topline and margin improvement from all three divisions".

Results/Updates: Dunelm, Marston's, Sainsbury's, John Wood and Tesco.


The bicycle retailer Halfords releases its second-quarter trading statement, having shed about 15 per cent since its last profit warning in April. Oriel Securities' Jonathan Pritchard is certainly not expecting a cheerful tone to be struck, saying the update "is perfectly likely to be poor and breed lower consensus forecasts".

With the end of its first-quarter seeing a drop-off in sales, he expects the trend to have continued, claiming that of the retailers that have recently updated, only clothes companies have really impressed. He predicts a 3 per cent fall in like-for-like sales over the period, although he is slightly more bullish over the rest of the year, when he is forecasting "a small pick up".

Citigroup believes Victrex's trading update will show that the hi-tech plastics company has suffered from "sluggish" growth over the second half of the year, with a 3 per cent rise in volumes after a huge 22 per cent jump for the first six months of the year. The broker blames this on a slowdown in activity growth globally, in part thanks to the Japanese earthquake knocking the automotive industry, while it also believes the eurozone sovereign debt crisis will have had a negative effect.

Also announcing an update on Thursday is Greggs, with the budget baker's third-quarter statement due. Shore Capital predicts "a resilient performance", with its analysts saying they would be "comfortable" with its total sales rising over the period by between 4 and 4.5 per cent. They hope the group remains on track to open 80 new stores over the year, and news is also expected on its plans to expand its manufacturing, including building a new confectionery bakery in Penrith.

Results/Updates: easyJet, Greggs, Halfords, Hays and Victrex.


Results/Updates: Vedanta Resources.



Cips manufacturing PMI; US construction spending; US ISM manufacturing.


Cips construction PMI; US factory orders.


BRC Shop Price Index; Cips Services PMI; GDP; Official reserves; US ADP employment change.


Bank of England's Housing equity withdrawal figures; BoE interest rate decision; New car registrations; Service sector data.


Producer prices data; US non-farm payrolls.

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
The giant banner displayed by Legia Warsaw supporters last night
football Polish side was ejected from Champions League
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
i100(and it's got nothing to do with the Great British Bake Off)
news It's not just the world that's a mess at the moment...
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
footballPremiership preview: All the talking points ahead of this weekend's matches
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
ebooksAn evocation of the conflict through the eyes of those who lived through it
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone