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The week ahead… Home Retail Group to update on Argos & Homebase

Supermarket Sainsbury’s will take the corporate spotlight this week when it reports on recent trading, with figures also due from Argos and Homebase parent Home Retail Group amid a flurry of retail updates.

Sainsbury’s is expected to reveal further sales growth at the expense of beleaguered rival Tesco when it reports on first-quarter trading on Wednesday.

Analysts believe a 34th successive quarter of like-for-like sales increases is on the cards after Sainsbury’s recently announced its fifth year of profit growth in a row.

Latest retail figures from Kantar Worldpanel show it was the only one of the four large supermarkets to gain market share - with the others being squeezed by the likes of Waitrose and Aldi at opposite ends of the market.

Chief executive Justin King – who saw his annual pay package surge to £4.3m – is credited with turning around the supermarket’s fortunes since joining in 2004.

He last month committed his future to the grocer after reports suggested he was set to leave to become boss of Formula One motor racing.

Catalogue retailer Argos comes into focus on Thursday when first quarter trading will reveal if it has maintained the recent turnaround that has seen it return to year-on-year profits growth.

An online push boosted the retailer’s annual figures, reported last month, but analysts have raised questions over whether its electricals division, boosted by a splurge on tablet computers, can maintain its momentum.

The drive for growth has also seen Argos undergoing an overhaul, which involves closing or relocating at least 75 stores over the next five years.

Parent company Home Retail Group posted its fifth consecutive slump in annual earnings last month as the improved Argos performance was dragged down by weather-hit sales at DIY chain Homebase, which it also owns.

Overall underlying pre-tax profits for Home Retail Group were down 10% to £91m.

However analysts are expecting that in the current financial year they will grow for the first time since 2008, with a figure of £100m predicted for 2013/14.

Thursday’s first quarter trading update will give the first indication of whether chief executive Terry Duddy has kept the recovery on track in the face of yet more poor weather for Homebase after the coldest spring for 50 years.

Source : Alistair Houghton - Liverpool Daily Post

10 June 2013
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