Tesco, Morrisons, Aldi, Lidl, Asda and Sainsbury's: What to expect from the supermarket sector's Christmas results

 
Catherine Neilan
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Tesco Set To Announce Christmas Trading Results
Who was rewarded this year? (Source: Getty)

Supermarkets were going for broke this Christmas, after a poor year of trading for the likes of Tesco, Morrisons and Asda, with Sainsbury's the only one of the Big Four in growth in the run-up to the festive period.

But with challengers Lidl and Aldi stealing market share from the price conscious, while Marks & Spencer and Waitrose scoop up those with a bigger budget, the challenges for the main players remained huge.

So, what should we expect as the sector starts to report its Christmas results?

Analysts at Shore Capital are (unsurprisingly) predicting big wins for discounters and premium groups, but there are also positive things expected from some of the more traditional operators. Here is what to look out for.

Lidl

Normally second to Aldi, Shore Capital believes 2015 could be a break out year for the budget grocer, which has demonstrated a "considerable and commendable self-improvement year-on-year".

"We expect comfortable double-digit sales growth form both LADs [limited assortment discounters]," said the firm. "Could Lidl have traded more strongly than Aldi?"

Marks & Spencer

The high street giant may be struggling to find its fashion feet, but in food the business really knows what it's doing. Shore Capital believes it could post record like-for-likes for the quarter. In the same space, Ocado is expected to deliver double-digit growth, although it is "burdened by a weaker than expected Q4 FY2015, slower than planned internationalisation and the growing shadow of a potential nemesis in the pure-play scene in the form of Amazon".

Waitrose is expected to gain market share, despite having slightly negative like-for-likes.

Sainsbury's

Heading into Christmas, Sainsbury's was the best of the Big Four, and Shore Capital expects the same to be true during the key time. "It is expected by us to be the strongest performing of the Big Four superstore players," the group said. "Overall sales are expected to be positive and we would not rule out Sainsbury reporting flat to slightly positive LFL sales for the quarter (say 0.0-0.5 per cent)."

The Co-op also stands to do well, and should report both sales growth and market share gain "perhaps benefiting in the north and west of the country from dismal weather more recently".

Tesco and Morrisons

Although not yet back to its strength, Tesco was "well set up and regimented for Christmas" and could have performed reasonably well, although there are concerns around footfall and potentially overuse of vouchers. Morrisons, meanwhile, is expected to show an improved performance on last year. Both these supermarkets are forecast to post like-for-like declines of around 1.5 to two per cent - which will represent a move in the right direction.

Asda

No such light at the end of the tunnel for the Walmart-owned supermarket. Boss Andy Clarke may have called the supermarket's "nadir" back in August, but it continues to struggle, and Shore Cap believes it is unlikely that the trajectory will have been "materially broken before the peak period".

"Management is overtly protecting margin over sales, which is an interesting strategy for a value based superstore group, and one that we worry about it has to be said in terms of its sustainability. Accordingly, Asda may be the Aston Villa of the supermarket league, holding up the supermarket table with LFL sales possibly two to three per cent," it added.

Iceland

Iceland is looking particularly vulnerable to discounters stealing market share as the bigger players invest in lowering prices to fend off the threat. "LFL sales may be negative and share lost," the analyst firm says.

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