ATTENTION will be focused on the airline and retail sectors this week as high-profile companies including Sainsbury’s, Dixons, BA owner International Airlines Group and easyJet report figures.

Sainsbury’s sales have held their ground in the supermarket price war but it will reveal on Wednesday how much damage discounting has inflicted on its profits.

The UK’s third largest supermarket chain, which has more than 1,000 stores, has been outperforming the grocery market in recent months, helped by its guarantee to match rivals on price.

Its strong growth has been underpinned by the rapid expansion of its Local convenience store network, while it claimed to have become the second biggest online grocer after sales increased by 20% to 165,000 a week.

The latest figures from Kantar Worldpanel confirm its strong growth, with sales up 5.4% in the 12 weeks to April 15, indicating that it has outperformed the supermarket sector, which grew at 5% as a result of rising food prices.

However, the increasingly fierce price war is expected to have taken its toll on profits. The City forecasts that pre-tax profits will rise 5% to �701 million in the year to the end of March, in a slowdown on the 9% growth a year ago.

Sainsbury’s profits will also have been hit by investment in its ambitious convenience store opening programme, designed to capitalise on the growth for local top-up shopping as soaring petrol prices cause people to make fewer trips to out-of-town supermarkets.

With Asda having turned up the pressure by guaranteeing to be 10% cheaper than rivals and Tesco threatening to up its game by revamping its Big Price Drop to include more promotions, there are fears that Sainsbury’s, which has some of the lowest profit margins in the supermarket sector, is exposed to an escalation in the price war. Its shares have fallen about 20% over the past year.

However, the strong run of special events may play into its hands, as Sainsbury’s could benefit from sales of party food around the Diamond jubilee and the Olympics. Its sponsorship of the Paralympics should also help boost its profile.

Thomson Holidays owner TUI Travel will heap further pressure on beleaguered rival Thomas Cook when it reports more strong trading on Tuesday.

Europe’s biggest tour operator has been dealing with tough conditions in the UK by reducing capacity, raising prices and focusing more on exclusive holidays that only it offers.

When it last updated the market, in March, it said that summer bookings had improved and were down 6% compared to 7% at the end of January, a trend that is expected to have continued.

The group said 48% of its summer programme was booked, while the average selling price is currently 8% higher.

TUI has benefited from the woes of Thomas Cook, which has seen confidence hit after it was forced to turn to its banks for additional support. TUI was quick to capitalise by launching adverts saying: “Another holiday company may be experiencing turbulence, but we are in really great shape.”

Thomas Cook recently reported a 2% decline in summer bookings in March, compared to a 1% fall the previous month.

Analysts will be looking to see whether this trend has continued and if the worries surrounding the UK economy, which is suffering a double-dip recession, have hit demand at TUI.

TUI is expected to report narrower losses in the three months to the end of March, after an increase in the previous quarter when the Arab spring hit demand for holidays in the North Africa.

Ed Birkin, an analyst at Barclays, forecasts an underlying loss of �221 million in the second quarter, �2 million less than the previous year.

He said the company’s growing share of the market in the UK means the division can return to underlying growth in the full-year, helping compensate for continued weakness in France. He expects group full-year profits to rise �10 million to �481 million. The first half-year is normally loss-making for TUI as it makes its money over the key summer period.

Telecoms giant BT’s turnaround will gather pace on Thursday as it benefits from rolling out superfast broadband and its cost cutting drive.

The group has upped the rate at which it is installing superfast broadband and recently said it will be able to provide the service to two-thirds of the UK by 2014 - a year earlier than planned.

This has helped it recruit more customers to its BT Infinity superfast broadband and BT Vision, its video and TV on demand service, which offers Sky Sports 1 and 2.

Infinity added 95,000 customers in the three months to the end of December while BT Vision added 39,000 new customers, bringing total customers to 680,000, trends which are expected to have continued in its final quarter.

The growing popularity of these higher margin services is expected to help stem the declines in revenues at its retail division, as it battles stiff competition for its traditional landline telephone business.

Despite a fall in overall group revenues, BT is expected to announce a rise in profits as it benefits from more cost-cutting measures on top of last year’s �1 billion savings.

Its formerly troubled Global Services division is expected to continue to cut losses, but profits at its wholesale arm may be hit by the reduction in mobile phone call termination charges.

Jerry Dellis, an analyst at Jefferies, forecasts that revenues will be down 3.7% to �19.3 billion in the year to the end of March, but underlying earnings will rise 2.7% to �6 billion.

He expects BT to lower revenue growth forecasts for 2013 but thinks the City will upgrade underlying earnings forecasts to �6.2 billion for the current financial year as its cost-cutting drive continues.

Its shares have increased 80% since February 2010, helped by an announcement of a plan to tackle a �4.1 billion black hole in its pension scheme.

The group recently said it will pump �2 billion into Britain’s largest private sector retirement plan and will look to eliminate the deficit within ten years.

The new boss of Currys and PC World owner Dixons Retail will unveil an improving sales performance on Thursday as the retailer benefits from the woes of BestBuy, Comet and Argos.

The electronics market has taken a pummelling since the economic downturn but Dixons, which has some 640 stores in the UK and Ireland, has been one of its most resilient players, helped by heavy discounting.

It has gained from the woes of Comet, whose owner Kesa Electricals recently sold it to private equity firm OpCapita for just �2, while BestBuy UK threw in the towel by closing its 10 large out of town stores.

And it is thought to have won customers from Argos, which recently said poor trading in electronics drove a 7.7% decline in sales, with televisions and video games particularly badly hit.

Seymour Pierce analyst Freddie George has described Dixons as a “last man standing” in the electronics market. Its shares have doubled in value since January in the hope it can cash in on its rivals’ pain.

New chief executive Sebastian James, who took over when John Browett defected to technology giant Apple, is expected to announce that it has again gained share of a declining market.

James Dilks-Hopper, an analyst at Numis, believes that group sales could be in positive territory, compared to a 5% decline in the previous quarter, helped by a strong performance in the Nordics.

Its last update showed that sales in UK stores that had been open more than a year declined 7% in the 12 weeks to January 7.

But it said trading in early January had been up 23%, helped by strong sales of iPads and Kindle ebook readers, while digital TVs and set-top boxes were given a boost by the digital switchover in the south-east.

The group stands to benefit from higher sales of TVs later in the year ahead of the Olympics and the Euro 2012 football championships.

The wettest April ever is set to have boosted bookings at budget airline easyJet as more people look to escape the UK’s unpredictable weather for warmer climes.

The Luton-based group, which operates more than 580 routes across 30 countries, will report on Wednesday that losses narrowed in the six months to the end of March to about �114 million from �153 million in the previous year.

The group, like many airlines, always reports a loss in the first half of its financial year but its improved performance has been helped by a milder winter, which caused less disruption, and higher baggage fees.

Wyn Ellis, an analyst at Numis Securities, expects the group to reveal that current trading has been further boosted as the “inclement” weather prompts people to take a holiday overseas.

The group has already shown a strong performance in recent months, which has helped its share price to rise by nearly a half over the past year.

Its last update revealed that revenues growth per seat in the six months to March 31 will be a better than expected 10%, with around half the improvement driven by higher fees and charges, which has helped it cope with rising fuel costs.

But while the improvement in first-half losses has been flagged by the company, investors will be looking for any signs about trading over the key summer period. Its last update said around 30% of seats for the second half of the financial year were booked.

An improved performance in the summer would help ease some of the tension with founder Sir Stelios Haji-Ioannou, who speaks for 37.4% of the company’s shares and has been agitating for an increase in dividend payments and tried to organise a rebellion against its remuneration report.

Sky-high fuel prices and the economic slump hurting much of Europe will leave their mark on the owner of British Airways on Friday.

International Airlines Group, which was formed by the merger between BA and Iberia, enjoyed soaring profits in 2011 as it benefited from strong trans-Atlantic demand and cost savings.

But since then, the UK and Spain have slipped back into recession along with several eurozone countries and Brent crude oil has been consistently above 120 US dollars a barrel.

IAG has said fuel costs were up nearly 30% in 2011 to 5.1 billion euros (�4.1 billion) and would rise by another one billion euros (�812 million) this year.

The City expects operating losses to widen to between 230 million and 250 million euros (�186 million to �203 million) in the first quarter of 2012, up from 102 million euros in the previous year.

IAG has previously warned that its performance will slip in the first half of 2012 but that it remains upbeat about the second half of the year.

Investors will be looking at whether it remains as optimistic and if it still thinks the Olympics will subdue demand, as it previously suspected.

IAG was formed to make cost savings and to snap up smaller companies in an industry seen as ripe for consolidation amid the rising cost of fuel and the squeeze in consumer spending. The group has said it expects operating profits to soar to 1.5 billion euros (�1.2 billion) in 2015, up from 485 billion euros last year.

The widening losses are expected despite strong demand in its trans-Atlantic market at Heathrow, but its Spanish operation has been hit by strikes and the worsening economy.

Tony Shepard, an analyst at Charles Stanley Securities, said: “There’s been quite a jump in fuel costs in the first quarter but also it’s a weak period for them seasonally.

“They are holding up well in terms of transatlantic traffic but European routes are competitive and tough going.”

Investors will also be looking for an update on the progress of its integration of bmi after IAG said it has failed to find a buyer for bmi baby, which is now likely to be closed, jeopardising 800 jobs.