How will Tesco and Marks and Spencer follow Morrison Supermarkets and J Sainsbury's when they report on Thursday?

By Proactive Investors / January 10, 2018 / www.proactiveinvestors.co.uk / Article Link

Keeping the food retail theme running, Thursday brings Tesco Plc (LON:TSCO) and Marks and Spencer Group Plc (LON:MKS) onto the schedule, following Morrisons, Sainsbury's and Lidl updates so far this week.

Of course Marks is not just a grocer, and the trading statement will likely be in focus for investors who are trying to gauge the Christmas period for the broader retail sector.

No doubt ASOS will be in the spotlight as well, as the online clothes seller is also due to update the market.

That reflects the changing characteristics of retail, where online is now the primary battleground.

Historically, Christmas has often ridden to the rescue of retailers but broker Jefferies reckons consumers will have spent cautiously over the yule-time period.

"As we have seen in recent quarters, we expect strong online and multi-channel retailers and the discounters to take share over the Christmas period," the broker said.

Jefferies is looking for M&S's LFL sales in its fiscal third quarter to be 3% lower year-on-year in the Clothing & Home division and down 1% in Food.

In November, M&S signalled that it will accelerate stores closures in an effort to make cost savings as it reported a 5.3% decline in profits in the six months to 30 September.  UK like-for-like sales fell by 0.3%, including a 0.1% drop in food sales and a 0.7% decline in the struggling clothing and home division.

As chief executive Steve Rowe ramps up his turnaround plans, M&S is now said to be considering pulling out of dozens of building projects across the UK, and there may be more details on this in Thursday's announcement.

Thursday's agenda

Trading updates: Tesco PLC (LON:TSCO), Booker PLC (LON:BOK), Marks & Spencer PLC (LON:MKS ), Boohoo.com PLC (LON:BOO),  AO World PLC (LON:AO), John Lewis Partnership (John Lewis, Waitrose); Barratt Developments PLC (LON:BDEV), Hays plc (LON:HAS), Nichols plc (LON:NICL), Premier Oil PLC (LON:PMO), Rathbone Brothers PLC (LON:RAT)

FTSE 100 ex-dividends: Sky PLC (LON:SKY)

Economic data: US weekly jobless

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