M&S and Sainsburys await Christmas trade verdict

High Street giant Marks & Spencer should return to like-for-like sales growth for the first time in more than two years when it posts its post-Christmas update on Wednesday.

The company is trading against far easier comparisons than in 2008, when it registered a 7.1 per cent fall in same-store sales at the height of the recession – its worst performance since 1999.

This steep decline eased to just 0.5 per cent for the July-September period while chief executive Sir Stuart Rose said he had been "encouraged" by recent trading as the panic among shoppers over the impact of recession begins to subside.

The group, which unveiled Morrisons' former chief executive Marc Bolland as its new boss in November, has gained market share in clothing and improved its lagging food performance.

But the sales figures should also reveal the extent of the damage from fierce supermarket competition in the build-up to the festive season.

Tesco in particular took on Waitrose and M&S with heavy promoting on its Finest premium ranges before Christmas as it plays on a greater willingness to indulge among shoppers.

Clive Black, analyst at Shore Capital Stockbrokers, said he expects M&S to produce "low single digit" like-for-like sales growth.

He added: "It should be a steady Christmas for Marks. A resurgent Waitrose will have been a thorn in the group's side and we don't expect it to have matched the momentum at Waitrose, but it will have been solid as Marks benefited from a trading up across the market."

Supermarket Sainsbury's will reveal how this year's festive sales compared with the record Christmas trading of 2008 when it releases third quarter figures on Thursday.

The chain hailed its best-ever Christmas a year ago, with 22.6 million customers in the final week before Christmas.

Like-for-like sales excluding fuel rose 4.5 per cent in the 13 weeks to January 3, 2009, but this year competition has been tough across the sector and plunging food price inflation has put sales figures under pressure.

The bad weather in the week before Christmas will also have given food retailers a logistical headache, according to Mr Black. He is pencilling in like-for-like sales growth in the low single digits for Sainsbury's, as its quarterly figures continue to ease back amid falling food inflation.