Marks & Spencer has benefited from festive food treats, with consumers trading up to premium ranges, but the retailer is still expected to report its worst Christmas since its inception.
Food sales are expected to have grown as shoppers traditionally seek quality in the festive period - however, analysts are expecting a sales drop of five per cent to 10 per cent. Overall, sales are expected to be down by between 5.5 per cent and 9.6 per cent.
Sir Stuart Rose, executive chairman of M&S, is expected to give an upbeat defence of the business and argue that any comparisons with previous years are meaningless given the turmoil in the economy.
The average profit forecast for M&S in the financial year to March 2009 is £618m, although some analysts say it may be as low as £540m-£570m - compared to £1 billion last year.
Freddie George, analyst at Seymour Pierce, said: “We believe the trading statement will disappoint, 2009-10 profits will be downgraded and the 2008-9 dividend will inevitably be cut.”
In contrast, J Sainsbury is expected to unveil sales growth of about four per cent from consumers who have switched from higher-priced branded products to own-label ranges.
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