The fragile state of British consumer spending could be laid bare next week with bellwether retailer Marks & Spencer expected to post its first decline in annual profit for three years.
Analysts expect Britain's biggest clothing retailer, which also sells homewares and upmarket foods, to report on Tuesday a profit before tax and one-off items of 675-706 mln pounds ($1.07-$1.12 bln) for the year ended March 31, according to an M&S poll, with a consensus of 694 mln. M&S made a 714 mln pounds profit in 2010/11.
Analysts forecast a maintained 17 pence a share dividend for the 128-year-old group, which serves about 21 mln Britons a week from over 730 stores.
Last month M&S missed fourth-quarter sales forecasts after running out of best-selling women's knitwear and footwear lines but said it would meet year profit expectations having made further cost savings.
Many retailers are struggling as shoppers grapple with higher prices, muted wage growth and government austerity measures, and worry about job security, shaky housing markets and fallout from the euro zone debt crisis.
M&S has generally performed better than most because its older and more affluent customers have been able to withstand the worst of the economic downturn.
Earlier this month an industry survey showed British retail sales posted their biggest fall in more than a year in April, while cards and gifts chain Clinton Cards entered administration, a form of protection from creditors.
Updates also due next week from luxury brand Burberry, online grocer Ocado, online fashion retailer ASOS, mother and baby products retailer Mothercare and cash and carry firm Booker, along with official retail sales data for April, will also shine a light on the strength of Britain's consumers heading into the summer.
THE SUN DIDN'T COME
M&S said last month it had enjoyed a good start to its spring/summer clothing launch, backed by an advertising campaign featuring Take That star Gary Barlow singing The Beatles classic "Here Comes The Sun".
The campaign is designed to capture the celebratory mood that M&S hopes will be generated by Queen Elizabeth II's Diamond Jubilee, Euro 2012 soccer and the London Olympics.
However, since M&S's update on April 17 Britain has endured a further month of torrential rain that is particularly unhelpful for fashion sales.
The firm currently trades from over 300 wholly-owned, partly-owned and franchised stores in 43 territories across Europe, the Middle East and Asia. It has 29 stores in crisis-hit Greece.
