Yahoo Finance Tesco takes the Christmas crown in festive retail wars
TESCO is expected to take the Christmas crown in the grocery wars this week as Britain’s biggest retailer reveals its best festive trading for six years.
A flurry of household names will this week unveil how they fared over retail’s so-called "golden quarter" amid concerns about the strength of the high street. A shock profit warning from Debenhams last week has revived fears that the high street fared badly during Christmas, despite Next and John Lewis reporting strong trading on the previous day.
According to analysts polled by the Telegraph, Tesco is predicted to report 2.5pc like-for-like sales growth, its best festive performance since 2012.
"The British are back in love with Tesco after a 10-year separation period," said Clive Black at Shore Capital.
"Tesco entered Christmas with growing momentum and there is no reason to believe this diminished," said Dave McCarthy at HSBC.
"We expect it to be the Christmas winner ahead of Morrisons and Sainsbury’s," he added.
The UK’s grocery giants are expected to have defied fears about weakening consumer confidence, helped by creeping inflation and a splurge in spending on festive food.
The improved sales performance will provide investors with further confidence in Tesco boss Dave Lewis’s turnaround of the supermarket following its accounting crisis in 2014.
The supermarket still needs to win shareholder approval for its £3.7bn takeover of wholesaler Booker, which was cleared by the competition regulator last month.
Morrisons is also expected to have enjoyed a good Christmas with retail like-for-like sales up by 1.3pc, or 1.7pc if wholesale sales from Amazon and petrol stations are included.
Last year the Bradford-based supermarket delivered stellar 2.9pc sales growth over Christmas, meaning it faces tough comparisons. Analysts at Jefferies said that Morrisons was “resilient when it matters”, while others noted the grocer’s focus on improved premium ranges, such as its jewel-topped pudding and festive pork pie.
Meanwhile, Sainsbury’s is expected to post the lowest growth of the big supermarkets, with like-for-like sales of around 1pc.
Analysts predict that Argos, which Sainsbury’s bought in 2016, has suffered from a tougher environment.
On the high street, Marks & Spencer is tipped to eke out a 1pc lift in clothing sales as the retailer works hard at improving its womenswear ranges.
Its once reliable Marks & Spencer food division is expected to only churn out flat sales.
“Food has been disappointing as innovation is now a little missing,” said Jonathan Pritchard at Peel Hunt.
The biggest winners could be online fashion site Boohoo, which is on course to notch up a 24pc leap in sales, and discount chain B&M Bargains, where brokers have pencilled in 4.5pc sales growth.
Ted Baker is forecast 6pc sales growth on the back of its strong international sales. Analysts predict that Supergroup will have benefited from the colder weather with forecasts of a 4pc lift in sales.
Analysts are predicting a 4pc like-for-like sales slump at Mothercare after it warned of lower shop footfall in November.
