A good performance by Safeway and Sainsbury helped to prevent our basket of shares from taking an alarming dip this month. However, even though many of our companies are outperforming the market, we took a loss of £37.
Tesco dropped a few points after its acquisition of T&S Stores while Somerfield proved the weakest retailer as its price halved to a dismal 49p.
Safeway, which rose 13p, was the only multiple to release a trading statement in October and it showed the slowest like-for-like growth of the big four at just 1.1% during the 16 weeks to October 12.
Both Safeway and Sainsbury will release their interims this month and Dave Stoddart at Teather & Greenwood predicted that Sainsbury would deliver pre-tax profits of £316m on turnover of £9.6bn, while Safeway would come in at £190m on turnover of £4.7bn.
He said Safeway's price had rallied as a result of takeover speculation, while Somerfield's had dipped dramatically after bosses Alan Smith and Martin Gatto left and the chain announced that operating profit was only likely to be at last year's level. The coming month promises to be a results-fest as Northern Foods and Dairy Crest also release their interims, and Associated British Foods announces its full year figures.
Last month ABF surprised the City with a £171m buy of Ovaltine and a clutch of other hot beverage brands from Novartis. Together with its Twinings tea operation this creates a £350m international hot beverages business. Williams de Broe analyst David Hallam said the Ovaltine acquisition would increase earnings by 2-3%.
He reckoned on full year pre-tax figures in the region of £415m.
Dairy Crest was the manufacturing star in our basket, up 29p. The firm has been affected by new dairy start-up costs, but Hallam said the acquisition of Uniq's spread business should enhance earnings for the full year.
Hallam added that Northern Foods usually had a relatively flat first half of the year but should bring in half year figures of £42.5m pre-tax.
Unilever proved doubters wrong last month with pre-tax profit for the third quarter up by 33% to £1.3bn, with its leading brand sales up 5.4%.