Investors in the retail sector will be very interested to see what Dunelm Group says on Wednesday about future prospects.
The UK's leading homeware retailer will unveil its full-year results that day, but few surprises are expected in the figures since the firm already announced in a trading update in July that the last 12 months had seen a "strong" performance, with full-year results and profits slightly ahead of analyst concensus.
But that statement from Denelm also mentioned that the macro outlook remained uncertain and the business could not predict exactly how consumers would respond to the increasing pressures on their finances.
And many of its shareholders are likely to have been unsettled by last week's news from the owner of Primark that it is expecting lower profits next year.
This led to Associated British Foods (ABF) seeing its shares dive nearly 8%.
The group is grappling with a strong dollar and soaring costs that have pushed the fast-fashion retailer's annual energy bills up by about £100million.
The Guardian says that, in previous years, Primark has faced an increase in energy bills of about £10million, but this year it has been 10 times that figure.
Surging inflation
The group said surging inflation was also expected to eat into shoppers' disposable incomes, and that the company was struggling with rising prices of raw materials.
However, ABF said it would not increase prices at Primark "beyond those already actioned and planned", as it attempted to protect sales.
The group also warned that its finances would be hit by the stronger US dollar against the pound and euro, which had made it more expensive to purchase some of its goods. This comes amid rising labour costs and supply chain disruptions, which have been adding to a growing list of financial pressures affecting the business.
ABF said it expected adjusted operating profits and earnings per share to be lower in 2023 than the current financial year, the results of which would be released on November 8.
The company said it had not decided whether it would have any cash to distribute to shareholders.
Primark has benefited from higher revenues in the UK after the end of Covid-related restrictions, which had forced its stores to close during the various lockdowns.
However, the budget fashion chain said it had experienced a drop in spending in continental Europe, where retail sales have been slightly weaker than expected.
Averting a further slowdown
The retailer said it would avoid raising its prices beyond the increases it already had planned over the next year, in an attempt to avert a further slowdown in spending.
"We believe this decision is in the best interests of Primark and supports our core proposition of everyday affordability and price leadership," it said.
It would mean keeping annual price increases in the "mid- to high single digits" in the year to August 2023, finance chief John Bason told the Guardian.
"Our price point and our competitive position is really important to us."
Mr Bason also welcomed news of the energy price cap announced by Liz Truss's Government on Thursday, which aimed to ease pressure on household finances.
"We cannot overstate the pressure the uncertainty has had on individuals' behaviours. So I think today's announcement should be warmly welcomed."
The finance chief denied the company was considering potential job cuts, saying plans to "improve store labour efficiency" and deliver lower operating costs would more likely result in reducing the number of hours promised to workers on temporary contracts.
FTSE 100
The UK's top share index, the FTSE 100, was up 33 points at 7,384 shortly after opening this morning, following Friday's 89-point gain.
Brent crude futures slipped 0.51% to $92.37 a barrel.
Companies reporting today
- Half-year results: HG Capital Trust