Snow-hit shops to give trading update

Speculation over the impact of snow and weak consumer confidence on the retail sector will finally end next week with the first of a deluge of trading updates from the high street, including Next and Clinton Cards.

Next delivered a surprise a year ago, but with snow adding to pressure on household spending the chances of a similar boost in Wednesday's festive sales update seem more remote.

Instead, the fashion chain is likely to have fared better in the post-Christmas sales period, with shoppers bringing forward purchases before the January VAT rise.

Wednesday's trading update only covers the 24 weeks to Christmas Eve and analysts will hope the company provides some additional comment on trading in that crucial sales period, as well as further guidance on margins in 2011.

The company has already warned of little sign of an end to the bubble in cotton prices, with shoppers braced for price tags to rise by up to 8 per cent in 2011.

Disruption caused by the recent snow has made forecasts difficult, but analysts at UBS predict a drop of 4.5 per cent in retail like-for-like sales in the 24 weeks to Christmas Eve. This includes an already-reported third quarter decline of 3.3 per cent and suggests a fall of around 6 per cent in recent weeks as Next battled tougher comparisons with a year ago, as well as the weather conditions.

In September, Next guided commentators towards a drop in second half retail like-for-like sales of between 1.5 per cent and 4.5 per cent. At the Directory arm, which has consistently outperformed the rest of the business, sales are expected to be around 6 per cent higher in the 24 weeks.

Panmure Gordon analyst Jean Roche said: "Next has offered free delivery online as a promotional tool this Christmas season so we will be watching out for any margin-related comments."

Greetings card retailer Clinton Cards, which owns the Birthdays chain, will face tough comparisons with a year earlier when it reports sales figures from the run-up to Christmas on Thursday. Like-for-like sales for the Clinton brand in the five weeks to January 3 were 3.6 per cent higher, while the Birthdays performance also continued to improve. Last year's figures represented a recent high point for the 800-store company as it later disappointed the City with a profits warning.

It prompted the company to unveil plans to update "the look and feel" of its Clinton stores, including a new logo, revamped shop fronts and redesigned uniforms. Clinton hopes to unveil a new website this month offering personalised card and gift services.

Domino's Pizza is expected to continue its strong performance on Wednesday when it updates the City on trading for the final quarter of 2010. The takeaway and delivery firm should continue to benefit from the trend of "the big night in".