Erikka Askeland: High street giants' sales figures come in from the cold

A trading update from Marks & Spencer tomorrow will reveal how well chief executive Marc Bolland's first Christmas with the high street giant played out.

The retailer enjoyed a good run in 2010, with like-for-like sales consistently beating expectations and profits in the first half of the financial year up 17 per cent at 348.6 million.

But fellow high-street retailers - including Next, Mothercare and HMV - revealed a slump in sales in the run-up to Christmas as sub-zero temperatures and snow kept potential shoppers indoors.

Analysts' consensus figures predict M&S's total like-for-like sales will be up 2 per cent, which includes a 1.5 per cent rise for food and 2.5 per cent for general merchandise, such as clothing.

Trading updates from supermarket giants Tesco, Sainsbury's and Morrisons will reveal how the festive period shaped up for food retailers amid the disruption of snow and ice.

It is thought the major players were able to claw back lost sales in a last-minute rush after the snow thawed.

Figures from market research firm Nielsen showed food retail sales soared 16.6 per cent in the week before Christmas, while sales rose by 6.9 per cent overall in December - beating the 6.7 per cent seen a year earlier.

But Morrisons, which will be first to report today, will have to address concerns that it has lost ground to its rivals, after the Nielsen data revealed it was the worst Christmas performer of the big four supermarkets.

Although it will flesh out its plans to create 6,000 jobs this year, its market share over Christmas dropped to 10.8 per cent from 11 per cent. This compares poorly with star-performer Sainsbury's, which notched up an increase from 14.9 per cent to 15.4 per cent.

Morrisons was 2009's Christmas winner, with a 6.5 per cent leap in sales, but last month was likely to have been tougher as lower food price inflation also took its toll. Credit Suisse analysts predict festive sales growth at a paltry 0.5 per cent.

Sainsbury's follows on Wednesday after a more resurgent period for the group, which saw sales growth accelerate to 2.9 per cent in its second quarter from 1.1 per cent in the first. It is benefiting from an offering that allows consumers to cut down on costs and trade up for luxury items, while aggressive moves to increase space and up the ante on non-food sales have also helped.

Credit Suisse is expecting like-for-like sales growth of 2.8 per cent excluding VAT and fuel for this festive quarter, or 3.6 per cent including VAT. The consensus is for 3 per cent growth including VAT - a sharp slowdown on last year due to food inflation, but likely to be the best performance of the top four players.

Tesco, which follows on Thursday, edged up its Christmas market share to 27.8 per cent from 27.6 per cent.But the group lagged behind its smaller UK rivals throughout much of 2010, particularly from a revived Sainsbury's.

The forecasts among analysts for this festive season are mixed, with Credit Suisse pencilling in UK like-for-like sales growth of 1.7 per cent excluding VAT and 2.5 per cent including VAT following an encouraging third quarter.

But Morgan Stanley analysts are more pessimistic. While they say total sales may show Tesco's best-ever Christmas thanks to additional store space, they have forecast zero growth excluding VAT on a like-for-like basis.

"We expect its performance to be anaemic at best," they said.

Trading updates from housebuilding giants Persimmon and Barratt will focus attention on the UK property market and the outlook for the year ahead. Charles Church-owner Persimmon will be first in the spotlight with its update today, while fellow builder Barratt Developments updates on Wednesday.

Analysts at Panmure Gordon have both Barratt and Persimmon on "buy" recommendations and said fears for the sector were overdone.