Companies Reporting: Sainsbury’s, Shop Prices, US Employment

Our regular look at the FTSE 350 and other companies reporting from 30 June – 04 July.

• Price hikes continue at Sainsbury’s
• BRC’s Shop Price Index shows rising grocery costs strain budgets
• US Employment figures will show how the labour market is holding up

J Sainsbury, Q1 Trading Statement, Tuesday 1 July

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: Sainsbury’s LON:SBRY put in an impressive performance last year, with revenue and profits both climbing higher. The nation’s second largest supermarket continued to scoop up market share, thanks to a sharp focus on both the value and premium ends.

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Attention now turns to next week’s first-quarter update, when markets will be looking at how changes to National Insurance and minimum wages are weighing on the bottom line. Early estimates suggested these changes could add at least £140 million of additional costs per year. But with efficiency programs and the closure of cafés well underway, investors will be hoping to hear some positive commentary on the cost-saving front.

Higher costs mean customers are likely to see prices at the tills shoot up too, with Sainsbury’s and a handful of peers hiking prices by more than 5% in May. Expect to see Sainsbury’s keep leaning into price hikes throughout the year to keep the top line moving in the right direction.

UK BRC Shop Price Index, Tuesday 1 July

Susannah Streeter, head of money and markets, Hargreaves Lansdown: After ONS data showed retail sales fell 2.7% in May, the latest BRC Shop Price Index will be closely watched for indications about where prices headed in June and how it’s affecting consumer sentiment. In May, the Shop Price Index showed overall prices were in deflationary territory, coming in at 0.1%, the same as April.

Given the trends emerging in May, and ongoing caution among shoppers, it’s likely that clothing and household goods sales have remained lower, as stores try and lure in more custom. But grocery prices have been on the rise again, which are making budgets even tighter. This trend is likely to have continued in June as some grocers try and pass on higher payroll costs and deal with some supply chain shortages.

While essentials will still bulk out trolleys, there may be further signs that customers are cutting back on goods like alcohol and tobacco. This data will be another piece of the jigsaw for Bank of England policymakers to puzzle over as they assess the stickiness of inflation and mull the prospect of further interest rate cuts this year.

US Employment Report, Thursday 3 July

Susannah Streeter: US consumer confidence deteriorated in June as workers worried about the availability of jobs ahead, amid the economic uncertainty sparked by President Trump’s tariff policies. So, there will be keen interest in what the US employment report shows, and whether the labour market is holding up or showing signs of weakness.

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The closely watched non-farm payrolls number usually lands on a Friday but this time around it’s a day earlier, due to the 4th July holiday. There are signs that employers are becoming more cautious with the churn in the labour market have decreased with less hiring and firing. Although overall the trend of jobs growth is expected to be positive, and the unemployment rate is expected to be stable around 4.2%, weakness is expected in certain sectors. The demand for workers in healthcare and social assistance and leisure is expected to continue but there could be signs of fresh employer wariness in other areas such as manufacturing and also the retail and travel business given weaker consumer confidence.

Signs of a softening labour market could signal the potential for the Fed to go faster with interest rate cuts this year, which could help market sentiment but if a set of robust figures are delivered, it may cause nervousness about higher borrowing costs lingering for longer.

FTSE 100, FTSE 250 and selected other companies scheduled to report