Morrisons to announce Christmas trading results

Logos of the big four supermarkets Image copyright PA
Image caption Analysts predict a tough year ahead for the big four

Supermarket chain Morrisons is reporting its Christmas trading figures later, kicking off a big week of results in the grocery sector.

Sainsbury's publishes its third-quarter and Christmas results on Wednesday, followed by Tesco on Thursday.

Asda does not release its figures until February, but it has predicted another year of "intense pressure".

Conditions in the UK grocery market are particularly gruelling, with all of the big four chains struggling.

David Cumming, head of UK equities at Standard Life Investments, said that looking at the year ahead, he was worried about all of them.

"They're all facing low-cost competition from Aldi and Lidl. They're all still losing market share.

"I think profits from all of them will remain under pressure as they struggle to lower prices and differentiate themselves on quality and service.

"Sainsbury's is doing the best of that group." Mr Cumming added.

Falling sales

The latest Kantar Worldpanel figures are also being released later on Tuesday, indicating the relative size of retailers' share of the grocery market.

Last year, Morrisons saw a 2.6% fall in its like-for-like third-quarter sales. The retailer dropped out of the FTSE 100 list of the UK's most valuable companies in December.

Sainsbury's saw a 1.6% fall in its like-for-like first-half sales, which strip out the impact of new store openings.

In the first half of the financial year, Tesco saw its UK like-for-like sales were down 1.1%.

As for Asda, its like-for-like sales fell 4.5% in the three months to the end of September, marking its fifth consecutive quarter of falling revenue.

Permanent changes

Asda boss Andy Clarke said on Sunday that he would sink another £500m into the price war with his rivals, as part of "radical action to win back our customers".

Asda, which is owned by US chain Walmart, appears to have been suffering more than its rivals, with analysts viewing it as the most vulnerable of the big four to the German discounters.

Asda's latest price-cutting investment is in addition to £1bn of investment announced in 2013 and due to be rolled out over a five-year period.

Mr Clarke said: "The structure of UK grocery retailing has permanently changed to reflect the way that customers shop today."

He described the change as "a global phenomenon", adding: "We saw the change coming and responded in 2013, but we didn't move fast enough."

Image copyright PA

Sales woes

Retailers including Marks and Spencer and Waitrose have already released their figures for trading over the Christmas period.

Last week, M&S said third-quarter sales of general merchandise were down by 5.8% for the 13 weeks to 26 December, although food sales were up 0.4%.

It also said chief executive Marc Bolland would step down in April, to be succeeded by Steve Rowe, executive director of general merchandise.

Like-for-like sales at Waitrose supermarket, which is part of the John Lewis Partnership, fell 1.4% over the Christmas period, although John Lewis sales overall rose 5.1%.

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites