Supermarkets eyeing resurgence

THE City will look for details of how Sainsbury’s plans to overhaul Argos when the supermarket posts annual results tomorrow, while trading at fellow Big Four retailer Morrisons is also in the spotlight.

Sainsbury’s posts full- year results after an eventful year that has seen the group return to sales growth and take over Argos owner Home Retail Group in a transformational deal. The grocer won a four- month takeover tussle last month to snap up Home Retail for £ 1.4billion.

Full- year figures will show the impact of another tough year for the sector, with analysts pencilling in a 16 per cent fall in underlying profits to £ 574million. But boss Mike Coupe has made inroads into shoring up trading, with the group posting its first quarterly like- for- like sales growth for more than two years in March.

It said like- for- like retail sales, excluding fuel, lifted by 0.1 per cent in the fourth quarter, compared with a 0.4 per cent fall in the third quarter. Morrisons will also give its latest snapshot when it updates on Thursday.

The group is also seeing a resurgence, revealing in March that it bounced back into profit after posting its first quarterly sales growth for four years.

It reported a pre- tax profit of £ 217million in the year to the end of January, compared with a £ 792million loss the previous year. Clive Black, retail analyst at Shore Capital, said Morrisons is likely to show a continuation of the improving underlying sales momentum seen in its fourth quarter.