Marks & Spencer PLC and Tesco PLC set to continue strong Christmas

Christmas updates from retailers so far have been encouraging by and large.

Sainsbury’s upped its profit forecast and there seems no reason why Marks & Spencer and Tesco won’t be equally upbeat about the holiday period tomorrow.

Of the Big Four supermarket cabal, Tesco is expected to be “the demonstrable winner”, Shore Cap head of research Clive Black predicted.

He said both Tesco and Marks were “potentially capable” of delivering a New Year upgrade.

Inflation will be one big talking point for the sector, he added, especially how the German discounters Aldi and Lidl are pursuing their strategies to the detriment of the sector’s earnings outcome, particularly Sainsbury and Tesco.

Sainsbury’s said it would go toe-to-toe with the discounters and what Tesco especially says tomorrow will be keenly watched.

Cladding cloud darkens over housebuilders

Two of the UK’s largest housebuilders – Taylor Wimpey and Persimmon – also report.

Both have already flagged very healthy numbers but since those updates the sector has been thrown a curveball by the government, which wants the developers to pay for the cost of cladding repairs to apartment blocks.

If rival Vistry’s response to the plan on Wednesday is a guide expect some strong objections from the big two.

Greg Fitzgerald, Vistry’s CEO told the Standard: “We’re probably an easy target, housebuilders. We make decent sums of money in a decent market and I’m sure other chief execs like myself are well paid and an easy political target. But I do think the government need to think about the entire sector, including suppliers of cladding insulation materials.”.

Taylor Wimpey and Persimmon shares are down around 8% this year so far, suggesting investors are worried especially with build costs rising and the boost from the stamp duty holiday starting to ease.

Major announcements Thursday 13 January:

Trading updates: ASOS PLC (AIM:ASC), Dunelm Group PLC (LSE:DNLM), Halfords Group PLC (LSE:HFD) , Hilton Food Group PLC (LSE:HFG), Marks and Spencer Group PLC (LSE:MKS), Persimmon PLC (LSE:PSN) , Taylor Wimpey PLC (LSE:TW.), Tesco PLC (LSE:TSCO), Wood Group (John) PLC

Economic announcements: Bank of England credit conditions (UK), jobless claims (US),