Next, Tesco, Greggs: Investors hit with flurry of festive trading updates
“The omnichannel retailer clearly still offers the right product, at the right price points and in the right format to its target demographic”
Investors will this week get an early feel for how well the UK high street fared in the run-up to Christmas as a flurry of household names release trading updates to the stock market.
Fashion and homewares stalwart Next, supermarket giant Tesco and snacks and bakery chain Greggs are among those set to provide an insight into recent trading fortunes.
They come amid hopes that consumers made a last-minute rush to town and city centres following lacklustre spending during the early part of the so-called “golden quarter” for retailers.
Analysts at investment platform AJ Bell noted that shares in Next were up by some 40 per cent year-on-year, despite the challenging economic backdrop.
“The omnichannel retailer clearly still offers the right product, at the right price points and in the right format to its target demographic, as evidenced by its uncanny knack of beating earnings expectations,” the analysts said.
“This came into play once more alongside October’s third-quarter trading statement, which beat expectations and prompted a further upgrade to guidance from boss Lord Simon Wolfson for full-price sales, total sales, pre-tax profit and earnings per share. That upgraded guidance will be the benchmark against which this Christmas trading update will be measured.”
They said the market would be looking for any update on incremental costs from wages, higher national insurance contributions and packaging taxes, both in the year just ending and the new financial year about to begin. Commentary around trade, tariffs, sourcing and shipping will also be of interest.
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Thursday is expected to see festive updates from both Tesco and Greggs, with the latter’s fortunes linked to the level of Christmas shopper footfall on high streets and in shopping centres.
Tesco’s shares have lost a little momentum since November, and the countdown to the late autumn Budget from Chancellor Rachel Reeves. However, they are still up by a fifth in the past year and stand very close to levels last seen in 2010, AJ Bell noted.
Britain’s largest retailer has also increased its share of the UK grocery market to 28.3 per cent from 28 per cent, as of November, according to Kantar.
AJ Bell’s analysts said: “It will be interesting to see if [chief executive] Ken Murphy has an initial stab at quantifying the impact upon profits for the year to February 2027 from the Budget’s reforms to business rates for large properties, though he may leave that until April’s full-year results. Either way, this Christmas and third-quarter trading update will be measured against the guidance given back in October.”
On Greggs, the analysts said investors would be looking out for any details on prices, volumes and costs.
They added: “Greggs has previously stated input costs would rise 6 per cent this year, thanks in part to higher national insurance contributions. Management did flag a stabilisation in flour prices as some good news at the third-quarter stage, and analysts thought this helped Greggs to stave off another profit warning, since cost of goods sold is one third of the total cost base.”
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