TESCO and Sainsbury's both post trading figures this week as the battle of the heavyweight supermarkets continues.
Both companies have initiated new pricing strategies to try to lure in cash-strapped shoppers – the success of each will become cleared when they issue trading updates on Tuesday and Wednesday respectively.
Morrisons was the first of the Big Four
supermarkets to report first quarter figures: sales rose 7.3 per cent, excluding fuel and VAT, and it said it was attracting more than half a million more new customers each week.
But it stressed that discounting was largely to thank for its new customer appeal, with 8,000 price cuts in the period.
Figures from Nielsen recently revealed that supermarkets have been offering record levels of discounting, with 34 per cent of all sales of goods on offer in May – higher than the 28 per cent normally expected for the month.
Tesco has been losing market share to rivals as consumers switch to find the best deal.
Its full-year figures showed fourth quarter same-store sales grew by 2.7 per cent, but it also revealed an improving picture since then with more recent sales up 3.4 per cent in the six weeks since the end of February. However, this does not compare well with its resurgent rivals.
The most recent TNS Worldpanel market share data showed Morrisons had the greatest level of annual growth at 7.9 per cent, followed by Sainsbury's at 7.8 per cent and Asda at 7.2 per cent.
All three grew their market share in the 12 weeks to 17 May, while Tesco continued to lose ground, with its share down to 30.8 per cent, from 31.1 per cent in the same period last year.
Sainsbury's has also added to the pressure on the market leader, having trumped Tesco with full-year like-for-like sales growth of 4.5 per cent.
Tesco will give a clearer picture when it updates on trading on Tuesday, with Sainsbury's giving news of its sales a day later.
Investors will be hoping for signs of some "green shoots" from design and engineering giant WS Atkins on Wednesday after its recent gloomy comments on trading – in April the firm said it had seen "no signs of a recovery" in a UK building market ravaged by recession.
This month official figures showed construction saw its sharpest quarterly fall in output for 45 years in the first three months of 2009.
But survey data since then has signalled that the pace of the decline is easing off, offering hopes that the beleaguered sector is over the worst.
Epsom-based Atkins has axed around 1,200 jobs since Christmas, and first flagged up problems with the domestic market earlier this year.
The firm is still winning work in the Middle East, but said that "confidence across the region has yet to return".
Majestic Wine will reveal whether the recession has continued to dampen wine sales when it reports full-year results today.
The UK's biggest wine warehouse revealed that demand for Champagne had plummeted over the Christmas period as bosses reined in their corporate spend.
Like-for-like sales dropped 2.9 per cent in the ten weeks to 5 January, compared with growth of 1.2 per cent in the run up to Christmas.
Last year's lower wine sales are expected to have taken their toll on Majestic's profits, with Altium Securities forecasting a 23 per cent fall in adjusted pre-tax profits to £12.7 million.
Transport group Go-Ahead updates on trading on Thursday following good news over the Southern franchise, run by its Govia joint venture subsidiary, however, eyes will be on its outlook for passenger numbers.
Go-Ahead, which operates Govia with French transport firm Keolis, won a bid to retain the licence, but is expecting a 2 per cent fall in passenger numbers in the year to June 2010 in the bleak economic climate.
Despite warning that it could take until 2016 for passenger numbers to recover, Go-Ahead delivered a bullish trading update two months ago, saying it was confident of hitting full-year profit targets regardless and the market will be keen for more guidance on annual results.
The Newcastle-based business has already sought to cut costs, including shedding jobs, under measures to cope in the tougher conditions.
The full article contains 739 words and appears in The Scotsman newspaper.
