STOCK MARKET WEEK: Sainsbury and Whitbread lay on a spread for the new administration

Food and drink is served up in the first week of the Labour administration.

Tomorrow J Sainsbury, the superstores chain, and Whitbread, now more of a leisure company than a traditional brewer, offer results.

With the stock market accepting Labour's landslide victory with splendid indifference it is possible results could provide the main talking point.

On Friday an early mark-down pulled in a few buyers, although utilities were under pressure as the message finally got home that their relatively comfortable existence could be coming to an end.

At this stage, of course, Footsie forecasts remain unchanged. After all, it is the size of the majority, not the result, which is a surprise and has not been factored into calculations. So hopes Footsie could stretch to 5,000 points in a year's time remain undimmed.

Still, it is doubtful if Footsie will experience the same strength under Labour as it enjoyed with the Tories. When John Major returned to No 10 five years ago Footsie was 2,436. Last week it closed at a peak of 4,455.6.

Although blue chips have romped ahead this year their performances have been far from uniform.

While drugs and banks have scored gains of more than 20 per cent distributors and vehicle engineers at the other end of the spectrum are down 10 per cent with the market fretting about the impact of sterling's strength on industrial profits.

Richard Jeffrey at Charterhouse Tilney thinks the fall has been overdone but "it may not be until later in the year that this area of the market moves back into favour".

He sounds a note of caution about the market's strength. "In the near term sentiment is likely to be dominated by the threat of rising interest rates in both the UK and US. We continue to believe that these will do more damage to sentiment than the current trends in share prices are indicating."

Another aspect of the bull run, which has drawn forth little comment, is the failure of second-liners to join in the fun. Their reluctant performance is illustrated by the FTSE 250 index, measuring the top companies outside Footsie.

True, after a somewhat sluggish display it picked up steam and established a modest string of record highs earlier this year.

But since peaking at 4,729.4 in March, the index has lost ground as Footsie has been in record-breaking form. Last week it closed at 4,498.1.

The brewers are among those which have not fully shared in Footsie's celebration. The sector has been ruffled by worries about the level of Labour's minimum wage and the introduction of a 48-hour week.

Pledges that the traditional head should be discounted when measuring a pint of beer could also cost the beerage dear.

Talk of the fierce competition among the big brewers and that the growing strength of retailers - pubs, supermarkets and hotels - will keep prices flat in a declining market has also taken its toll.

But Whitbread as the smallest of the major brewers can probably leave its bigger rivals, Bass and Scottish & Newcastle, to slug it out.

Under chairman Sir Michael Angus it has been highly adventurous and its collection of pub/restaurants, fast-food outlets, assorted restaurants, hotels and even coffee houses make it more a rounded hospitality group with brewing accounting for only 13 per cent of its profits.

Merrill Lynch expects year's profits to emerge at pounds 320m, up from pounds 283m.

On the other hand, Sainsbury is set to confirm that it has had a rotten year. It has been outgunned by deadly rival Tesco and in January felt obliged to put out a profit warning.

So the once-leader of the supermarket pack faces a doleful profits presentation. Around pounds 650m against pounds 764m with an unchanged 12.1p dividend is expected.

Its shares have fallen from a 582p peak in l994 to finish last week at a sad 341.5p. They have been down to 308p.

Is the worst over? NatWest Securities is far from sure. Its highly rated analysts, Tony MacNeary and Mike Dennis, say: "It is still too early to talk of recovery and the basis for profit upgrades remains absent." They add that clear evidence margins have stabilised is needed for any optimism to develop over the shares.

Another struggling retailer is in action this week, Kwik Save. It is five months into a five-year restructuring programme that is aimed at arresting a damaging profits slide.

Interim profits on Thursday are not expected to produce any hope of better things to come. With the revamp still in its infancy and many of the old problems still unresolved the no-frills food retailer is likely to produce profits of pounds 41m against pounds 44.2m.

Year's results are seen as emerging at pounds 70m against the pounds 135m of a few years ago.

Body Shop International, another high street chain where profits have been far from spectacular, should offer evidence of a return to growth. Year's results, also on Thursday, of pounds 39m against pounds 32.7m, are regarded as the most likely outcome.

Today British Petroleum offers quarterly results. Its last three-monthly figures were below market expectations; the first time such a disappointment had occurred since 1992.

This time round if the oil giant manages net income at, say pounds 715m, it should satisfy the ever-demanding market.

Royal Bank of Scotland, tomorrow, is forecast to produce interim figures of pounds 360m against pounds 301m.

It should have experienced strong banking profits, but the Direct Line insurance off-shoot is unlikely to do better than break even.

Others reporting tomorrow include BSkyB and Tate & Lyle. The satellite television station should offer nine-month profits of, say, pounds 220m, up from pounds 178m.

T&L has had a tough six months, particularly in the US, and its interim results will represent a bitter swallow with the sugar group reporting about pounds 130m against pounds 162.3m.

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