Market Watch: Supermarket chains sweeping up

Published on Saturday 14 November 2009 12:09

THE supermarket chain Morrisons updates sales figures for the third quarter on Thursday, reflecting the relative health of the UK sector.

In the six months to August it saw sales rise 7.8 per cent, up from 7.3 per cent in the first quarter and ahead of Tesco.

However, a fall in food-price inflation resulted in a 4.2 per cent increase in Tesco's takings in the 12 weeks to 5 October, according to analysts TNS, in a fight-back against middle market rival Sainsbury.

Morrisons, meanwhile, was the best performer in the most recent quarter, with growth 8.4 per cent ahead of last year. This helped lift its market share from 11 to 11.5 per cent.

Retail pair Halfords and Mothercare will post interim results this week, having pulled through the recession in decent shape.

Mothercare reports half-year figures on Wednesday after a solid year as it shrugs off the wider high street gloom. It reported like-for-like sales up 4.1 per cent in the six months to 10 October after notching up its 17th quarter of UK sales growth in a row.

The firm has been taking big steps in international markets while also driving strong growth in the UK through canny strategic moves.

The 2005 acquisition of the Early Learning Centres has enabled it to carry ELC products in Mothercare stores, which is supporting domestic sales, up 3 per cent in the second quarter. This helped offset higher costs, including pensions and the impact of the weak pound on imports.

Total sales rose 7 per cent in the second quarter.

Mothercare plans to expand in India under a deal with real estate company DFL Brands.

It already has four stores in China and is launching Mothercare in Australia and ELC in South Africa.

Mothercare's last annual results were well received as it delivered a 12.4 per cent hike in profits to 37.1 million, and its latest half-year sales result suggests that it is on track to impress again this year.

Analysts are forecasting annual profits to rise to 40.4m.

Car parts and bike retailer Halfords, which reports half-year figures on Thursday, is likely to confirm it is picking up business from the "make do and mend" attitude among consumers, with car maintenance, cycling to work and holidaying in the UK all providing a sales boost.

It said it expected profits of between 59m and 61m in the six months to 2 October, against profits of 49.1m for the same period last year.

Pubs group Enterprise Inns is set to show a 20 per cent fall in profits to 211m on Tuesday after a tough year. But just 90 pubs out of its estate of more than 7,000 are currently closed – compared with more than 100 in July.

Week ahead

TOMORROW

Majestic Wine, Robert Wiseman Dairies, Workspace (interims); Interserve, Persimmon (trading updates)

TUESDAY

EasyJet, Enterprise Inns, Care UK (finals); Big Yellow, British Land, Burberry (interims); Avis Europe (trading update)

WEDNESDAY

Land Securities, Mothercare (interims); Bovis Homes, Wolseley (AGM)

THURSDAY

Halfords, SABMiller, Young & Co's Brewery (interims) Morrisons (trading update)

FRIDAY

Fuller Smith & Turner (interims)