A trio of companies with value credentials are about to update the market on the health of the UK consumer. Upcoming statements from Tesco (TSCO), Greggs (GRG) and pubs operator JD Wetherspoon (JDW) will allow investors to take the temperature of a consumer buckling under the strain of the cost-of-living crisis and fretting over a looming recession.

Rising food prices, domestic energy bills and mortgage payments are squeezing shoppers’ wallets, while the plunge in sterling is adding to inflationary pressures.

The latest GfK Consumer Confidence index hit a new record low of -49 for September 2022, painting a bleak picture of the consumer environment, though the energy price cap and the Government’s tax cuts might provide some relief to the public.

Tesco’s first-half results on 5 October will be scrutinised for commentary around footfall and average basket size, particularly as Aldi recently overtook Morrisons to become the UK’s fourth biggest supermarket with cash-strapped customers switching to discounters in droves.

Ocado Retail, the joint venture between Ocado (OCDO) and Marks & Spencer (MKS), reported on 13 September that its average basket size fell 6% to £116 in the 13 weeks to 28 August.

In an update on 17 June, Tesco insisted a ‘laser focus on value’ helped it outperform the market over the 13 weeks to 28 May, though CEO Ken Murphy did highlight ‘some early indications of changing customer behaviour as a result of the inflationary environment’ and Tesco’s online performance coming up against some tough year-on-year comparative figures.

Investors will be watching food-on-the-go retailer Greggs’ third quarter update on 4 October for evidence it continues to trade well and gain market share, where total sales rose 27.1% to £694.5 million in the first-half period running to 2 July 2022.

Rising raw material, energy and wage costs mean it doesn’t anticipate material profit progression this year. As new CEO Roisin Currie stressed in August, Greggs offers ‘exceptional value for customers looking for food and drink on-the-go’, although the danger for Greggs is that customers begin making their own packed lunches at home rather than grabbing food and drink on the move.

Wetherspoons uncorks full-year results on 7 October, having previously said like-for-like sales for the first 11 weeks of its final quarter were 0.4% lower than pre-pandemic levels and guided towards higher-than-expected full year losses of around £30 million.

Broker Numis says ‘the combination of soft sales and accelerating cost inflation in an operationally and financially geared business is a concern’.

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