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December is a key trading period for UK retailers which can make or break the year. With the Budget not as damaging as some may have feared, companies are now in a position focus on the festive season.
Next is seen as a barometer for the UK retail sector due to its wide range of products and broad customer base.
Traditionally it is also the first large retailer to report on Christmas trading and therefore, eagerly watched by analysts for clues about the performance of other high street and online retailers. It is scheduled to release a sales report on 6 January 2026.
Next looked to be in decent shape when it revealed full price sales up 10.5% in the 13 weeks to 25 October, prompting the company to raise full-year pre-tax profit guidance by around 3% to £1.14 billion.
Under CEO Simon Wolfson, Next has built a reputation of managing market expectations by underpromising and overdelivering.
Analysts have increased their annual EPS (earnings per share) forecasts up by around 6% since the start of 2025 suggesting the stock continues to perform better than expected.
Fellow retailer Marks & Spencer is scheduled to report on 7 January 2026 and investors will be looking for evidence that the turnaround under CEO Stuart Machin remains intact, notwithstanding interruption from the cyberattack earlier in 2025.
The food division at M&S has been a consistent performer, reporting 37 consecutive months of volume and value outperformance. Sales of Christmas party and premium lines will be scrutinised against the tougher economic backdrop.
Management has previously stated they expect the second half to be at least in line with the prior year, so investors will be looking to see if M&S reconfirms guidance in early January.
The UK’s two biggest grocers, Tesco and Sainsbury's are also expected to report on festive trading in the first week of 2026.
Grocery inflation slowed to 4.7% in the four weeks to 2 November, as promotions ramped up ahead of Christmas, official industry data showed.
Both supermarkets increased their market share with leader Tesco rising to 28.2% and Sainsbury’s increasing its share to 15.7% from 15.5%.
Sainsbury’s recently hiked its full year underlying pre-tax profit forecast to more than £1 billion from around £1 billion previously. Meanwhile Tesco raised its full year adjusted operating profit to a range of £2.9 billion to £3.1 billion from £2.7 billion to £3 billion.
These upgrades imply the grocers expect a strong trading period over Christmas.
Tom Sieber: Content Editor
Tom Sieber is AJ Bell's Content Editor. He was previously the Editor of Shares Magazine. He has been with the business since 2012.
Tom is a regular contributor to the AJ Bell Money & Markets...
