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Week ahead: Blizzard of trading updates to show the icy front on UK high streets

Published: 07:29 06 Jan 2017 EST

M&S store

A blizzard of trading updates from the high street will descend on the stock market next week, with the retail sector already hard hit by an icy blast following this week’s warning from Next Plc (LON:NXT).  

Given the clothing retailer’s surprising decline in sales over the Christmas period and its cuts to profits forecasts for both this year and next , updates on Thursday from closest peers – Marks and Spencer Group Plc (LON:MKS) and Primark-owner Associated British Foods PLC (LON:ABF) - could send the most shivers through the sector.

Discount fashion chain Primark is continuing to gain market share in the UK, and investors will also be keen to hear of progress in the US, where the business opened its first store last year

But that expansion will also put into focus the impact of the post-Brexit drop in the pound on Primark’s profits, as margins decline, although - as a food producing conglomerate too - AB Foods could see this balanced by a lift for its Sugar division.

Primark’s like-for-like sales have declined in the current financial year, and although there are soft comparatives after a weak Christmas period in 2015, Next failed to see this play out in its festive trading.

The hard times for clothing on the high street saw M&S’s new boss, Steve Rowe, unveil plans to cut back its general merchandise stores in November, while boosting its Simply Food chain.

Investors are expecting M&S’s Clothing and Homewares stores to continue to struggle, reflecting increasing garment costs due to sterling’s fall, and rising inflation as a result of the weaker pound.

However, they think M&S’s food offering, and its online sales should continue the improving trend of recent years, with Next having flagged better sales from its Directory business.

Food for thought ...

The main Christmas food focus though will be on the listed-supermarket groups, all of which also unveil their latest trading news next week, with the sector in the midst of a price war to combat the advance of the German discount chains, Aldi and Lidl..

Britain’s biggest food retailer, Tesco PLC (LON:TSCO) looks to be coming out the best currently, with recent till-roll data research showing it has been increasing its market share as the actions made by its chief executive, Dave Lewis since taking over in 2015, start to bear fruit.

The efforts of new management  at struggling Yorkshire-based William Morrison Supermarkets PLC (LON:MRW) has also looked to be paying off recently, with the firm seeing rising sales growth in 2016, which investors hope will have continued over Christmas and the New Year.

But J.Sainsbury PLC (LON:PLC) has looked to continue to be a laggard in the supermarket sector, so investors will be most keen to see any signs of the early effects of its £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.   

Significant announcements expected ...

Monday

Interims: Ilka PLC (LON:IKA)

Trading updates: JD Sports Fashion PLC (LON:JD.), William Hill PLC (LON:WMH)

Tuesday

Interims: Games Workshop PLC (LON:GAW)

Trading updates: Boohoo.com PLC (LON:BOO),  Carr’s Group PLC (LON:CARR), Just Eat PLC (LON:JE.), GoCompare.com Group PLC (LON:GOCO), Majestic Wine PLC (LON:WINE), Saga Group PLC (LON:SAGA), Tarsus Group PLC (LON:TRS), William Morrison Supermarkets PLC (LON:MRW), Galliford Try plc (LON:GFRD), Big Yellow Group PLC (LON:BYG)

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)

Thursday

Trading updates: AO World PLC (LON:AO.), Associated British Foods PLC (LON:ABF), ASOS plc (LON:ASC), Barratt Developments PLC (LON:BDEV), Booker PLC (LON:BOK),Debenhams PLC (LON:DEB), Dunelm Group PLC (LON:DNLM), Hays plc (LON:HAS), Hilton Food Group PLC (LON:HFG), Jupiter Fund Management PLC (LON:JUP), Marks & Spencer Group PLC (LON:MKS), Paysafe PLC (LON: PAY), Premier Oil PLC (LON:PMO), SuperGroup PLC (LON:SGP). The Gym Group PLC (LON:GYM), Tesco PLC (LON:TSCO)

Friday

Finals: SIG PLC (LON:SHI), XP Power PLC (LON:XPP)

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