TESCO reports it half yearly results on Wednesday with analysts predicting international sales offsetting sluggish figure for the UK.
The grocer, which has slashed the prices on thousands of lines in a bid to trigger sales rises, will also be eyeing second quarter results from rival Sainsbury’s, which is reporting on the same day.
New Tesco chief executive Philip Clarke has been putting his stamp on the company, with a shake-up of product ranges as well as pulling the business out of Japan.
The £500m product price reduction plan is being seen a bold move to steal a march on other supermarkets in the so-called ‘Big Four’, particularly Asda which has its own price guarantees.
Keith Bowman of Hargreaves Lansdown said: “Coming results are expected to see international sales remaining strong, whilst same store UK sales are forecast to make further modest recovery. Prior to the announcement, analyst opinion currently denotes a buy.”
Meanwhile Sainsbury’s is pinning its hopes on its emphasis on helping families to budget for their shop.
Its first quarter update saw like-for-like sales excluding fuel, but unlike Tesco still including VAT, gaining by 1.9 per cent.
Bowman said: “The coming update is expected to see a similar like-for-like performance reported, aided by fuel price campaigns.
“Nonetheless, worries over profit margins remain, with analyst opinion currently denoting a weak hold.”
Other corporate announcements expected this week include updates from plumbing group Wolseley, retailer Halfords and recruitment company Hays.
Hays, like many other recruiters has been relying on international growth, particularly in Asia, as the UK economic climate remains relatively weak.