The Week Ahead - Retailers to report on Summer trading

The state of Britain’s battered High Street will be laid bare this week as some of the country’s biggest retailers reveal the full impact of the Olympics and the washout summer on trading.

All eyes will be on under-pressure Home Retail Group which has suffered more than most because shoppers at its Argos unit have been hit hardest by the downturn.

Conditions are expected to have continued to be challenging over the second quarter with some analysts predicting underlying sales at the catalogue retailer falling 2 per cent, dramatically worse than the 0.2 per cent decline in the first.

Others have been more optimistic with David Jeary, an analyst at broker Investec, suggesting more resilient sales, dropping to around 0.8 per cent. The digital switchover in London was behind a boost in sales of state-of-the art televisions with rivals Dixons and John Lewis benefiting.

Argos is also thought to have seen an upside, but the focus of concern has shifted to the group’s Homebase business. The damp summer will have hit trading hard at the DIY and garden furniture chain and the Olympics will have distracted families from shelling out to improve their homes.

Chris Chaviaras, an analyst at Barclays, said: ‘We expect flat Homebase gross margin in the second quarter and forecast its underlying sales down 3.5 per cent as we envisage a profound negative effect on sales due to the unfavourable weather across the quarter.’

It will be a similar story at B&Q owner Kingfisher which announces its half year figures on Wednesday. Apart from suffering from the same issues the firm also has a big exposure to France with its Castorama chain where austerity measures are biting hard.

Source: Rupert Steiner - This is money.co.uk
http://www.thisismoney.co.uk/money/markets/article-2199938/High-Street-retailers-reveal-impact-Olympics-weather.html