The UK's three major listed supermarkets are expected to report solid Christmas trading this week, although investor focus will be on the outlook given this year's expected squeeze on consumer spending.
On 10 January, Morrison's is expected to report underlying sales growth of 1.1 per cent for the nine weeks to 1 January according to an average of analysts' forecasts. This would be a fifth consecutive quarter of growth.
On 12 January, analysts expect Tesco to reveal UK like-for-like sales growth of 1.25 to 2 per cent for its third quarter to 26 November, and growth of 0.6 to 1.5 percent for the six weeks to 7 January. These results would build on four straight quarters of underlying growth.
At Sainsbury's, a like-for-like sales fall of 0.8 percent is predicted for its third quarter to 7 January, although it is still expected to see volume growth and underlying sales growth of 1.5 per cent at Argos. The supermarket reports on 11 January.
On the face of it, Sainbury's could be perceived as the relative loser of the grocing trio, but, unlike Tesco and Morrisons, it is not in turnaround mode and has not had to rebase its like-for-like sales performance.
German discounter Aldi, which suffered a sales growth slowdown in 2016, updates on Christmas trading tomorrow.
Last year, shares in Tesco and Morrisons soared 38 percent and 55 percent respectively, reflecting a recovery in trading as consumer spending held up in the wake of the referendum.
But retailers fear a reduction in spending as inflation begins to erode real earnings growth in 2017. Sterling's devaluation since the Brexit vote has also driven up supermarkets' import costs, as have commodity price increases. They also face further cost pressures from the national minimum wage, business rates and utilities.
There are also signs that Asda, the British arm of Wal-Mart and the sectors third biggest player, will make life tougher for rivals in 2017. Analysts say a new management team is starting to make an impact, putting more staff on the shop floor and generally improving store standards. While underlying sales slumped 5.8 percent in its third quarter, they anticipate a significant improvement when it reports fourth quarter results next month.