THE rivalry between supermarket giants Tesco and Sainsbury’s will be in focus this week as the pair go head-to-head with trading updates.

Tesco is expected to suffer another bloody nose on Monday by reporting that it has continued to lose out to rivals despite heavy discounting and a �1 billion recovery plan.

The chain, which is the UK’s biggest supermarket with 2,800 stores, is fighting to win back shoppers after dire trading led to its first profits warning in 20 years, while its shares recently hit three-year lows.

Chief executive Philip Clarke, who recently declined his bonus because of the poor performance, has launched a recovery plan that has seen the grocer focus on revamping stores, hiring more staff and sharpening pricing.

But a trading update for the first quarter of its financial year is expected to reveal that the recovery plan has yet to gain momentum, and the group is still losing market share amid the price war and a buoyant performance from discounters Iceland, Aldi and Lidl.

Andrew Kasoulis, an analyst at Credit Suisse, expects like-for-like sales excluding fuel and VAT to decline 1.5% in the 13 weeks to May 26, in only a slight improvement on the 1.6% fall in the previous quarter.

The sales performance comes at a time when food price inflation has been more than 4%, indicating that underlying sales volumes at Tesco are significantly down.

Tesco has been trying to turn around its performance through a raft of special offers, including money-off vouchers.

At the same time, it has started a major campaign to revamp its stores and improve levels of customer service by recruiting more staff, while its Value own label range has been revamped as Everyday Value, removing the austere looking blue and white stripes and improving its quality.

Mr Kasoulis said: “While we think there has probably been some underlying sales improvement, aided by the very high level of money-off coupons, we think April was weak - impacted by weather.”

He noted that Tesco will be up against strong figures from the previous year when it was boosted by the royal wedding, whereas this year’s Diamond Jubilee was not included in its first quarter trading period.

Strong sales of party food and patriotic fare for the Queen’s Diamond Jubilee will help Sainsbury’s hold its own in the supermarket price war on Wednesday.

The UK’s third biggest grocer, which operates more than 1,000 stores, was one of the main sponsors of the Thames Diamond Jubilee Pageant and is thought to have benefited more than most of its rivals from the long weekend of celebrations.

It capitalised on the event by organising its own Jubilee Family Festival in Hyde Park featuring performances from BBC One’s Strictly Come Dancing and worked with brands including Persil and Andrex to develop exclusive products emblazoned with the Union Jack.

It is set to report a strong performance in the 12 weeks to June 9, helping it maintain its share of a highly competitive market. Unlike Tesco, its figures will include the benefit of the long weekend.

James Anstead, an analyst at Barclays Capital, expects the chain to report like-for-like sales growth of 2%, which would be a slight slowdown on the 2.6% in the previous quarter but “a good performance” considering the wash-out weather during much of April and May.

He expects “upbeat comments” about the strength of trading over the long weekend.

Sainsbury’s has been one of the best performing of the mainstream supermarket chains in recent months as it benefits from a Brand Match initiative, which guarantees to match Asda and Tesco on 14,000 branded goods.

It has also benefited from the strong growth in its Sainsbury’s Local convenience store chain and recently claimed to be the fastest growing online grocer.

The new boss of British success story Mulberry is set for a fashionable entrance when he delivers his first set of results on Thursday.

Frenchman Bruno Guillon, who joined as chief executive at the end of March, is expected to reveal a 50% surge in pre-tax profits to �35.4 million at the Somerset-based group as demand for its products overseas grows rapidly.

Investors will be keen to hear former Hermes managing director Mr Guillon’s thoughts on the business and how he plans to maintain growth in the face of slowing Asian economies.

Mulberry, which was founded in 1971 by Roger Saul and his mother Joan, has showed no signs of falling out of popularity after a successful launch of its Lana Del Rey bag, named after the platinum record-selling singer.

The group’s best-known product of recent times has been the Alexa bag - inspired by model and TV presenter Alexa Chung - but under creative director Emma Hill it has also won praise for its up-and-coming ranges.

Philip Dorgan, an analyst at Panmure Gordon, said: “It is one of our top picks in 2012, because we feel that it can deliver significant, sustained top line growth that will have a leveraged impact upon profitability.

“It has barely scratched the surface of its global potential, with only a handful of stores in many key luxury goods markets.”

Mulberry shares are 50% higher than they were a year ago and at 1950p it has a market value of around �1.2 billion.

Europe’s biggest regional airline Flybe is bracing itself for a wider full-year loss in its annual results on Monday after UK demand for flights took a nosedive.

The airline, which flies from airports including Bristol, Cardiff, Doncaster, Edinburgh and East Midlands, is set to make a loss of around �8.2 million in the year to March 31, compared to a �4.3 million loss the previous year.

The group previously promised to reveal further detail on how it plans to increase revenues per seat, deliver cost reductions and match capacity to demand.

Shares in Flybe are 65% lower than they were a year ago after it released a number of profit warnings.

But Mark Manduca, analyst at Bank of America Merrill Lynch, said an improvement in trade in the final quarter of its financial year signalled a positive change.

He said: “Despite the continued cyclical pressures on volume, we believe that Flybe is well positioned for growth in the long-term. In particular, we highlight its hybrid model, combining some of the attractive characteristics of the mainline carriers with some of the strengths of the low-cost operators.”

The group last month extended its joint venture with Finnair by agreeing to fly 12 Embraer E190 regional jets on behalf of Finnair under a contract flying arrangement.

The aircraft will fly for Finnair on a number of European short haul routes, taking advantage of the venture’s competitive cost base.

The rising popularity of pre-paid gift cards will help voucher group Park deliver a “strong financial performance” in its full-year results on Tuesday.

The group has heavily invested in Flexecash, its prepaid card system, which is used by a growing number of major retailers including Argos, Boots, Debenhams, Iceland, Matalan and Marks & Spencer.

The Birkenhead, Merseyside-based company, which also offers a Christmas savings package with 45 pre-paid weekly instalments, has issued more than �75 million of value on the Flexecash system.

The group has also indicated that early sales volumes were ahead in its Christmas savings division, which has been boosted by a television advertising campaign featuring former Loose Women presenter Coleen Nolan.

Ben Thefaut, an analyst at Arden Partners, said: “Park is poised to deliver earnings growth of around 20% and with a well established model that is aligned to demand for value in an austerity climate, we anticipate sustained outperformance.”

Christmas 2011 delivered sales volumes which were ahead by over 5% when compared with the prior year and Christmas 2012 is “similarly encouraging”, Park said, with an increase in orders of around 6%. The product has proven popular with consumers wary of spending in the current economic climate.

In a bid to open up new markets, the company invested in mobile applications to improve customer service in the year.

Love2reward, the corporate division, which supplies own brand vouchers, prepaid cards and individual store vouchers to companies who use the gifts as incentives for staff, increased billings volume by 15% in the year, compared with the same period last year.

The group reported a pre-tax loss of �5.2 million in the six months to September 30, against a �4.5 million loss last year, as 80% of orders are actually dispatched in the second half of the year.

Carphone Warehouse has already admitted that profits at it main European division will be flat on last year as it grapples with a slump in its pre-pay mobile phone markets.

Carphone Warehouse Europe, which has 2,400 outlets across Europe, has seen the UK pre-pay market fall by between 30% and 40% in the quarter to the end of March, resulting in a 5.5% fall in like-for-like sales.

As well as the lack of new pre-pay smartphones and cuts in subsidies from the major networks, it has been impacted by the recent trend for mobile phone upgrades to be on 24 month rather than 18 month contracts.

Carphone is hopeful that more smartphones will be launched in the pre-pay segment this year and has hailed a “significant” opportunity to grow sales of ‘non-cellular’ products such as tablets, accessories and apps.

The company plans to push the range out to 150 stores this summer and investors will be looking for an update on how the initiative is progressing.

It has been growing its non-phone revenues through the roll out of more Wireless World formats, with 392 of these stores by the end of March.

The company has said underlying earnings at the Carphone Warehouse Europe business are expected to be towards the bottom end of between �135 million and �150 million, compared to �134.6 million in the previous year.

Overall group bottom-line profits at Carphone, which also includes its stake in Virgin Mobile France, will be down, reflecting the sale of its stake in Best Buy Mobile business in North America for more than �800 million in a move that triggered a payout to shareholders.

It also shut its 11 big box Best Buy stores in the UK, which were run as a joint venture with the US electronics giant.