The week ahead: Supermarkets will highlight belt-tightening by consumers

Tesco is expected to say that UK like-for-like sales excluding fuel and VAT fell 1.2 per cent in the second trading quarter.

This would be a deterioration on the 0.7 per cent fall in the previous quarter. Tesco recently launched a price war on 3000 products.

However, Dave McCarthy, an analyst at Evolution Securities, said the price cuts were a clear sign that Tesco’s UK business faces “severe issues”. He said: “We suspect that unless Tesco cuts prices further, we will not see much impact once things have settled down.”

Despite the pressures, Britain’s biggest food retailer is still expected to have increased profits overseas on growth in countries such as Korea, Thailand, and China.

Christopher Hogbin, analyst at Bernstein Research, expects Tesco’s group sales to have risen 8 per cent to £32.2 billion, with pre‑tax profits up 8.5 per cent to £1.7 billion.

Sainsbury’s is expected to have had a better second quarter on sales, with Q2 like‑for‑like revenues expected to have increased 1.5 per cent excluding fuel. However, unlike its bigger rival, Sainsbury’s figures include VAT.

The sales increase would be down on the 1.9 per cent rise in the previous quarter.

Sainsbury’s has also been expanding its non-food ranges to help catch up with the likes of Tesco and Asda. Its TU clothing range is expected to have benefited from a recent advertising push.

Building materials giant Wolseley is forecast to unveil a rise in trading profits to £608m from £450m, according to the City consensus, when it publishes annual results tomorrow.

The performance by the group, which is very strong in plumbing supplies, has been underpinned by tens of thousands of job cuts, a stock market rights issue to raise cash, and a swathe of business sales and shutdowns. Wolseley has also switched its tax base to Switzerland.

The sale of the Build Center business in the UK and the Brossette division in France for a combined total of £310m has also left Wolseley nearly free of debt. That compares with borrowings of nearly £3 billion after the 2008 credit crunch.

Bikes to car parts group Halfords, whose shares have nearly halved in value in the past year as supermarkets have muscled in on its bike sales, is expected to put out a muted trading update on Thursday. The retailer’s like-for-like sales grew just 1.1 per cent in the 13 weeks to 1 July as sales of car gadgets and maintenance equipment dipped. Halfords has also been hit by falling demand for technology such as sat-navs.

Jonathan Pritchard, retail specialist at Oriel Securities, expects pre-tax profits for the year to March to slide 23 per cent to £97m. Shares in Halfords are now about half their peak of 560p last summer.

Fashion retailer Ted Baker is expected to have increased its pre‑tax profit to £8m from £7.5m when it posts interim results on Thursday. Andrew Wade, an analyst at Numis, is forecasting a full‑year profit at the group of about £27m after a positive trading statement in June.

Ted Baker revealed back then that a 9.4 per cent rise in retail sales, plus a 42 per cent jump in wholesale income, though said the sales pace was expected to slow over the rest of the year.