The UK’s biggest supermarket groups will shed light next week on how they fared over the key Christmas period amid pressure on shoppers’ budgets.
Tesco and Sainsbury’s will both provide third-quarter updates for investors and analysts, where they will reveal their sales for the weeks running up to Christmas.
Both grocers are expected to reveal another strong period of growth as recent investments in pricing continue to pay dividends and win them more shoppers.
However, the updates also come as a raft of cost increases linked to the autumn Budget cast a shadow over their potential profitability for 2025.
Tesco, the UK’s largest bricks-and-mortar retailer, will update its shareholders on 9 January.
In its previous update in October, Tesco bosses said consumers were in “reasonably good shape” moving towards Christmas, as it said cuts to food prices helped to drive strong sales volumes.
Total sales across the group grew by four per cent to £31.5bn over the 26 weeks to 24 August, compared with the same period a year earlier.
This came despite an easing of food and drink inflation.
However, shoppers still face significant pressures on their budgets, with millions still witnessing rises to rents and mortgages, alongside increases in utility costs.
Tesco is among retailers to continue focusing on pricing as a result, investing heavily into its Aldi price match in order to win shoppers from its German discount rivals, alongside more deals for Tesco Clubcard members.
Industry data from experts at Kantar last month estimated that Tesco saw sales growth of 5.2 per cent over the 12 weeks to 1 December.
This significantly outstripped the wider grocery market, which saw 2.4 per cent growth, helping Tesco to increase its market share even further.
Elsewhere in the sector, Sainsbury’s is also expected to reveal another rise in revenues when it reports its trading figures on 10 January.
Sainsbury’s has also further shored up its position as one of the UK’s largest retailers in recent months, growing its share of the UK grocery market to 15.9 per cent.
The London-based group is estimated to have witnessed 4.7 per cent sales growth over the three months to 1 December, according to Kantar.
It comes after it said group revenues increased by 2.3 per cent to £17.2bn for the 28 weeks to 14 September, in an update in November.
However, the update was dominated by warnings from the group’s bosses over the heavy impact of policies from Rachel Reeves’ October Budget.
Chief executive Simon Roberts revealed that the company is expecting to face an extra £140m in costs as a result of higher national insurance contributions.
Investors will be keen for more detail on the group’s profit outlook once this, and the rise in national minimum wage, comes into force in April.
By Henry Saker-Clark, PA Deputy Business Editor
