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Market to check out retail figures

1/ 9/2008

RETAIL and leisure firms are in the spotlight this week with updates from the likes of HMV, Premier Inn owner Whitbread and pubs group JD Wetherspoon.

HMV will update on trading on Friday after a recent upturn in fortunes for the previously-struggling games and music retailer.

The company has been hit by cheaper competition and digital downloading in recent years, but a 25 per cent increase in pre-tax profits to £56.6m in the year to April 26 showed the fruits of chief executive Simon Fox's three-year turnaround plan.

The group has shifted its focus to grab a bigger slice of the higher growth games market. It has also set out its stall with five successful pilots of its next generation stores - featuring a "social hub", entertainment websites and games zones - which have outperformed the rest of the chain.

In the UK and Ireland overall like-for-like sales grew 11.4 per cent in the year to April. Shares have risen around 25 per cent in the last two months.

Leisure group Whitbread's estate of Premier Inn hotels is once again expected to be the trading highlight of the firm's latest update, due on Thursday.

The budget chain saw double-digit sales growth in the 13 weeks to May 29, up 10.7 per cent on a like-for-like basis, and Whitbread said the brand continued to outperform the market. Figures for the 24 weeks to August 15 should underline this progress.

It also bolstered Premier Inn in July by agreeing to swap assets with pubs firm Mitchells & Butlers - acquiring 21 hotels while 44 of its Beefeater and Brewers Fayre restaurants went the other way.

The lower margin restaurant and Costa Coffee businesses may be at risk of a downturn but City watchers are firmly focused on further prospects for Premier Inn - attracted by its defensive qualities in a tougher climate.

Pubs chain JD Wetherspoon is likely to post a fall in pre-tax profits of more than 10 per cent in Friday's annual results after a difficult year.

Smoking bans, rising input costs and a weaker consumer backdrop have presented real headaches for pubs groups across the board, while Chancellor Alistair Darling added to the pain in March's budget with duty hikes.

Consensus forecasts predict an 11 per cent fall in profits to around £55m in the year to July 27, although it has not been all doom and gloom for the Watford-based group, which has around 700 pubs and 20,000 staff.

Promotions for seasonal drinks such as Pimm's helped it reverse a sales dip during the last quarter, with like-for-like sales 0.4 per cent ahead in the 11 weeks to July 13.

During the 50 weeks to July 13, underlying sales declined one per cent but this improved on the 1.5 per cent fall during the group's first nine months.