Dominic Jeff: Market braced for further gloomy consumer news

M&S is expected to add to evidence of a slowdown in consumer spending when the retail bellwether posts its fourth quarter trading update on Wednesday.

The firm bucked the trend over Christmas and traded well while many of its rivals were hit by the severe weather. But analysts have forecast a decline in like-for-like sales at the group of 2.5 per cent in the 13 weeks to 2 April.

There are fears of further gloom from the retail sector on Thursday when car parts and bicycle group Halfords reports on trading.

The chain, which has 464 stores in the UK and Ireland, had a disappointing Christmas season for cycle sales, which slumped 16 per cent on a like-for-like basis.

The decline looks set to continue in the fourth quarter to April, with analysts at Investec forecasting a 2 per cent decline in like-for-like sales across the whole group.

David Jeary, of Investec, said: "Under a scenario of squeezed disposable incomes arising from inflation across less discretionary spending areas such as food, fuel and utilities, retailers of bigger-ticket and more discretionary categories are likely to come under greater pressure."

The City will also look for progress in the rebranding of Nationwide Autocentres, which Halfords bought in February last year.

Pizza and pasta restaurant chain Prezzo will reveal whether January's VAT increase and the soaring cost of food has affected its recovery when it announces full-year results on Wednesday.

Like many restaurants and other businesses in the leisure sector, Prezzo saw its profits hit by the recession.

It scaled back restaurant openings as profits stalled, but a strong performance in its last half-year results gave it the confidence to announce that it was back in growth mode.

The firm, which has more than 150 outlets, announced last month that it had bought six properties from Caffe Uno Brasseries for 550,000 as part of its plans to open 20 restaurants in 2011.

When Prezzo last updated the market with results in September, it revealed underlying profits rose 21 per cent to 6.2 million in the six months to 27 June on sales up 11 per cent.

Nigel Parsons, an analyst at Evolution Securities, expects Prezzo to make underlying annual profits of 17.8m.

But the market will be keen for news on trading since the year-end.

Further signs of a recovery in the recruitment market are expected to be revealed when Hays and Robert Walters provide trading updates.

The industry suffered in the recession as companies reduced their staffing levels, but is staging a comeback after firms made efficiency savings, and as the private sector jobs market picks up.

Analysts at Royal Bank of Scotland believe recruitment firms are also benefiting as companies use more temporary staff to cope with growing demand.

Hays is expected to report further strong growth when it updates on third quarter trading on Thursday.

The company previously said underlying profits increased 48 per cent to 52.1m in its half-year, while net fees rose 23 per cent to 326.1m as its overseas markets, including Continental Europe and Asia Pacific, showed rapid expansion. Analysts at RBS expect the company's underlying earnings to increase 39 per cent to 132m in the full year.

Rival Robert Walters is also expected to report another robust performance when it updates on its first quarter trading on Wednesday.

The agency has large operations in the rapidly growing Asia Pacific region, which helped revenues to grow by 41 per cent to 424.2m in 2010, while net fee income rose 49 per cent to 155.4m.

Although its growth rate slowed to 37 per cent in its final quarter, analysts at RBS expect a strong update.