Market Watch: Retailers hope for Christmas gifts

Both groups stand to benefit from the gap on the high street left by failed retailers Zavvi and Woolworths.

HMV revealed in half-year figures last month that it was being dragged lower by struggling book chain Waterstone's, which saw like-for-like sales slide 5.1 per cent in the 26 weeks to 26 October.

This offset a 1.6 per cent rise from HMV's main UK and Ireland division, which is expected by analysts to have seen an improving trend over the festive season.

Experts at Killik & Co are pencilling in low single-digit like-for-like sales growth at HMV in the UK.

HMV's trading has been overshadowed recently by its 46 million takeover offer for music venue and festival firm Mama Group, less than a year after the two companies formed a joint venture.

The market will also be looking for improved trading from video games retailer Game Group.

The chain's recent third-quarter trading update was very badly received, as it revealed that price cuts by supermarket rivals had hit pre-Christmas sales figures.

Despite record demand for blockbuster releases Call of Duty: Modern Warfare 2 and Fifa 10, Game said like-for-like sales in the 18 weeks to 5 December were down 13.9 per cent, against a fall of 16.6 per cent in the previous 33 weeks.

Killik & Co analysts expect trading to have improved and predict declines in the region of "high single digits".

News from the "fast fashion" sector is due on Thursday when Associated British Foods – which owns Primark – reports back on Christmas trading.

Figures from rival budget retailer New Look have boded well for the chain, reporting a 5.9 per cent hike in sales in the quarter to 2 January.

Panmure Gordon analysts recently raised their target price for the stock ahead of the first-quarter figures.

AB Foods has been throwing much of its weight behind Primark to support its growth, opening 12 new stores in the year to 12 September.

Nightclub owner Luminar will give the verdict on the Christmas season in Thursday's update. The firm spent most of 2009 on the back foot as unemployment among 18-24 year-olds curbed spending among young clubbers.

Luminar said last month it was well-prepared for Christmas and New Year trading, which would "to a large extent" determine final results.

Week Ahead

TUESDAY

Dunelm, Game, Interserve (trading updates); Debenhams, Topps Tiles (AGMs)

WEDNESDAY

Greggs, SIG, Tesco (trading updates)

THURSDAY

Associated British Foods, Barratt Developments, Booker, Halfords, Home Retail Group, HMV, Luminar, Mothercare, Premier Foods (trading updates)

FRIDAY

Man (trading update); Bellway (AGM)