Tesco and Sainsbury's figures due - The Press Association

(UKPA) – 18 hours ago 

Tesco and Sainsbury's will go head-to-head next week when the supermarket giants present figures from a tricky summer trading period.

Tesco's £500 million price cutting campaign has been hailed as a boost for under-pressure households, but in the City it is also being seen as a signal that the supermarket retailer wants to "get its mojo back".

Interim results on Wednesday are expected to reveal that UK like-for-like sales excluding fuel and VAT fell 1.2% in Tesco's second quarter, as shoppers benefited from fierce competition among rival supermarket and discount chains.

Tesco's share of the grocery market slipped to 30.4% from 30.8% in the three months to September 4, while Sainsbury's and Morrisons saw slight gains.

Dave McCarthy, an analyst at Evolution Securities, said the Big Price Drop is the biggest admission yet that Tesco's UK business faces "severe issues".

In contrast to Tesco, Sainsbury's is set to reveal its recent solid growth has continued when it updates on the same day. The UK's third biggest supermarket chain is expected to report a 1.5% increase in like-for-like sales excluding fuel in its second quarter, down from 1.9% previously.

Its figures are expected to have been boosted by running promotions on fuel during the period, which helped encourage more shoppers to drive to its stores.

In other corporate news, shares in Halfords have nearly halved in value in the past year after the retailer was hit by the downturn in consumer spending and supermarkets muscled in on its bike sales.

The retailer, which has 464 stores in the UK and Ireland, reported a decline in like-for-like sales of 1.1% in the 13 weeks to July 1 as sales of car enhancement and maintenance equipment fell because customers drove less and looked to save on costs.

The company's latest trading update, on Thursday, is unlikely to provide too much in the way of cheer, with Jonathan Pritchard of Oriel Securities warning the statement is "likely to be poor and breed lower consensus forecasts".

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