Top stores report on festive sales

Tesco bagThe winners and losers of the hard-fought Christmas trading period will be revealed when supermarket giants Tesco, Sainsbury's and Morrisons report back on their festive sales performances.

Waging war through promotional deals and money-off coupons, the major players of the supermarket sector ramped up competition before Christmas as they sought to attract cost-conscious shoppers.
Waitrose, owned by the John Lewis Partnership, has already laid down an impressive marker with a 5.4% hike in like-for-like sales between December 18 and 31, despite scaling back its Christmas advertising.

That growth figure is expected to dwarf its larger supermarket rivals, with Morrisons likely to have suffered a particularly difficult Christmas. The fourth-biggest grocery group, which reports on Monday, saw like-for-like sales, excluding VAT and fuel, fall 2.1% in its previous quarter after admitting it had not done enough to advertise its promotions.

Despite a pledge to step up discounting and tactics to draw in hard-up shoppers - including a Christmas meal with all the trimmings from £2.49 per person - Morrisons is again seen reporting sales down by around 2%. Broker Jefferies is even more pessimistic, believing same-store sales fell by as much as 2.8% as discounters such as Aldi and Lidl attract more business.

Sainsbury's, which follows on Wednesday with its update, has enjoyed better fortunes over the past year thanks to a well received money-off coupon campaign. It said on revealing a 5% hike in half-year profits in November that it had printed nearly 250 million Brand Match money-off coupons since the scheme's launch a year earlier.

Sales rose 1.7% for the six months to September 29, but the consensus across the City suggests growth may have eased back to 0.9% in a sign that Tesco's fight-back is paying off.

Tesco, which reports on Thursday, is likely to have pulled out all the stops after a poor performance the year before and a disappointing previous quarter. Sales slipped back into the red in the third quarter, down 0.6%, after being dragged lower by a poor performance in non-food, although industry data suggested a turnaround towards the end of the period.

The group saw the best sales growth of the "big four" players in the four weeks to November 25 and lifted its market share, according to Kantar.

Deutsche Bank is predicting sales up 0.8% in the six weeks to January 5 thanks to a "strong promotional package and an improved grocery offer", alongside offers such as free Click and Collect grocery during December. Panmure Gordon retail analysts believe Tesco notched up the strongest sales of the "big four" and are pencilling in a 1% gain, adding that the rise sets up a year of "significant strategic change" for the group.

© 2013 Press Association
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