Supermarket data and Virgin Money UK take centre stage, with Alphabet

For the first day of February, the grocery and banking sectors will get more time in the spotlight, while Google parent Alphabet will take centre stage later in the day.

Ahead of its bigger banking rivals later in the month, Virgin Money UK PLC (LSE:VMUK) (Virgin Money UK PLC (LSE:VMUK)) will kick off the sector’s reporting season, reporting on the three months to 31 December, the first quarter of its fiscal year.

Back in November, chief executive David Duffy hailed the challenger bank’s return to statutory pre-tax profits and the improved net interest margin (NIM), reduced costs, improved impairments and strong capital levels that enabled a proposed reinstatement of dividends. 

Virgin Money also last year said it would accelerate the next stage of its ‘digital first’ strategy, including the development of a digital wallet to rival the fintech unicorns chomping into the banking sector’s breakfast. 

In this update investors and analysts will be looking for comments on what is an intense mortgage market, as well as movement in NIM and guidance for future periods, given the Bank of England rate hike in December and another one potentially this week.  

Analysts at Peel Hunt anticipate there will be upside to the 1.72% consensus NIM estimate for the full year, compared to 1.62% in 2021, but with the challenger having warned twice on costs it “needs to avoid further slippage from the current guidance for flat underlying costs”. 

Grocers going back to normal?

Some insights into the performance of supermarkets Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) will be gleaned from the latest till data collected by Kantar, which is released at 8am.

The last update showed Christmas sales slipped from the record levels seen in 2020 but were stronger than pre-pandemic figures, as in-store visits hit their highest level since March 2020.

Food price inflation, however, was at its highest for four years, excluding a brief period in spring 2020 when promotions were cut amid product shortages.

Without the extra festive boost it will be a chance to see how things are going for the sector, how many people are sticking with online grocery sales and so on, and what Kantar says about food price inflation in light of the recent newspaper stories around Jack Monroe and the shrinking value range and big price rises on the cheapest products in her local store. 

In the last Kantar update, Ocado Retail, the joint venture between Ocado Group PLC and Marks and Spencer Group PLC, saw a 2% increase in sales over 12 weeks, Aldi was flat, Tesco dipped 0.9%, Asda fell 3.9%, Sainsbury’s dropped 4.4% and Morrisons lost 6.5%.

Macro matters 

Ahead of the Bank of England monetary policy committee (MPC) meeting later two days later, there will be lending and money supply data from Threadneedle Street, which will give an excuse for the…