Sains­bury’s to de­liver ro­bust show­ing af­ter on­line boost

Su­per­mar­ket’s sales have risen dur­ing the crisis; fel­low re­tailer Pri­mark is also see­ing de­mand re­turn

The Daily Telegraph - Business - - Business - The week ahead

To­day

Full-year

Draper Esprit, Wood Group (John) Eco­nomics

Mort­gage ap­provals and lend­ing, con­sumer credit (UK), busi­ness and con­sumer con­fi­dence (euro­zone), in­fla­tion (Ger­many), pend­ing home sales (US)

To­mor­row

In­su­la­tion spe­cial­ist SIG has not been the strong­est per­former of re­cent years.

Up­dat­ing the mar­ket ear­lier in June, the group re­ported a grad­ual im­prove­ment in its trad­ing per­for­mance over the prior two months – though the pick-up may have been catch-up sales rather than ris­ing de­mand. Citi’s Ami Galla praised the group’s new man­age­ment for re­solv­ing to de­velop “a ser­vice ori­ented fo­cus with in­vest­ment in peo­ple” – but warned fur­ther ac­tion would be needed.

“While we be­lieve this is a sen­si­ble ap­proach – the cur­rent mar­ket con­di­tions is likely to make it more dif­fi­cult to turn­around the UK busi­ness,” she wrote. Tues­day’s full-year re­sults may give a sense of what the road ahead in­volves.

In­terim re­sults

On The Beach

Full-year

SIG

Eco­nomics

Q1 GDP fi­nal read­ing (UK and Spain), busi­ness in­vest­ment, BoE chief econ­o­mist Andy Hal­dane hosts we­bi­nar (UK), in­dus­trial pro­duc­tion (Ja­pan), in­fla­tion (euro­zone), con­sumer con­fi­dence (US)

Wed­nes­day

Su­per­mar­ket Sains­bury’s will serve up re­sults for the first quar­ter on Wed­nes­day – and UBS’s Sreed­har Ma­hamkali is ex­pect­ing a “ro­bust” per­for­mance.

In­dus­try data would ap­pear to carry out that the­sis: Sains­bury’s sales have risen dur­ing the Covid-19 crisis, and it has en­joyed a ma­jor boost in on­line sales, driven by lock­down de­mand.

“Con­tin­ued strong de­mand for food at home and healthy op­er­at­ing lever­age” should lift the group’s per­for­mance across the full year, Mr

Ma­hamkali wrote, but said it “too early” to re­vise es­ti­mates.

In­terim re­sults

Costain

Trad­ing state­ment

Sains­bury’s, Topps Tiles Eco­nomics

Man­u­fac­tur­ing PMI fi­nal read­ing (UK, euro­zone, France, Ger­many, Italy, Spain), Caixin man­u­fac­tur­ing (China), ADP em­ploy­ment change, ISM man­u­fac­tur­ing (US)

Thurs­day

Pri­mark – the cor­ner­stone of As­so­ci­ated Bri­tish Foods’ slightly eclec­tic oper­a­tions – kicked back in ac­tion ear­lier this month af­ter a pe­riod of to­tal shut­down. Jef­feries’ James Grzinic an­tic­i­pates “a faster emer­gence from hi­ber­na­tion than ini­tially ex­pected”, with con­sumers flock­ing to­wards value propo­si­tions as they re­fresh their wardrobes. “A stream of news­flow has pro­vided plenty of ev­i­dence that shop­pers, fac­ing a de­pressed eco­nomic en­vi­ron­ment but ea­ger to es­cape the con­fines of the last three months, are pri­ori­tis­ing price,” he wrote.

Also of­fer­ing a trad­ing state­ment is Meg­gitt. Though the en­gi­neer­ing group has seen its share price heav­ily hit by tur­moil in the avi­a­tion sec­tor, Jef­feries’ Sandy Mor­ris sees it emerg­ing from the crisis stronger, and with op­por­tu­ni­ties to seize ground from its ri­vals.

Full-year

DS Smith

Trad­ing state­ment

As­so­ci­ated Bri­tish Foods, Meg­gitt Eco­nomics

PPI in­fla­tion (euro­zone), unem­ploy­ment (euro­zone, US), non-farm pay­rolls, trade bal­ance, job­less claims (US)

Fri­day

Full-year

Fuller Smith & Turner

Eco­nomics

Con­sumer con­fi­dence (UK), ser­vices PMI fi­nal read­ing (UK, euro­zone, Ger­many, France, Italy, Spain), Caixin ser­vices PMI (China), US pub­lic hol­i­day (In­de­pen­dence Day).

Eco­nomic week ahead

If the Covid-19 re­ces­sion has a sil­ver lin­ing, it may be that house­holds are im­prov­ing their fi­nances at a record pace, pil­ing up sav­ings that can later be spent to sup­port the re­cov­ery.

We will see more ev­i­dence to­day from Bank of Eng­land lend­ing num­bers for May.

Analysts ex­pect a re­peat of April’s data, with house­holds pay­ing down a net £3bn.

Mort­gage balances may fall by a sim­i­lar level as moving house was tough in the lock­down, so few new loans were made by lenders.

To­mor­row the Of­fice for Na­tional Sta­tis­tics (ONS) gives fur­ther de­tail on the econ­omy in the first quar­ter of 2020 as the virus be­gan to hit. Pur­chas­ing man­agers’ in­dex sur­veys from Wed­nes­day to Fri­day will show the re­cov­ery be­gin­ning to emerge in June.

Mean­while a se­ries of Bank of Eng­land speeches in­clude An­drew Bai­ley, the Gov­er­nor, talk­ing to­day about the fi­nan­cial risks of climate change, Andy Hal­dane, chief econ­o­mist, to­mor­row on the econ­omy in the sec­ond quar­ter, and Jon Cun­liffe, the deputy gov­er­nor, on cen­tral banks’ roles in the pan­demic.

Tim Wal­lace

Analysts fore­cast a strong per­for­mance from Sains­bury’s with sales up dur­ing lock­down

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