The Week Ahead: Make mine a double: pubs and alcohol slake the City's thirst

The market is taking a rest tomorrow for the bank holiday, but much attention later in the week will focus on Guinness owner Diageo, which releases its annual results on Thursday. In early July, the company - which is also behind brands including Smirnoff, Johnnie Walker and Baileys - warned that its sales growth had slowed in the second half, due in part to sluggish conditions in Europe.

While its recent performance has been flat, some observers, including JPMorgan, expect its forecasts to be subject to upgrades rather than downgrades. Analysts have been encouraged by the sale of spirits in the US and trading conditions in Latin America and the Asia Pacific region. Diageo, which sided with Pernod Ricard in its successful bid to buy Allied Domecq in a £7.6bn deal, is also looking to cut costs from its supply chain.

Another good guide to the health of the British liver will be the results of JD Wetherspoon, the pub operator. Analysts expect like-for-like sales to fall by 2 to 2.5 per cent, while investors will be interested in any comments from the company's founder and chairman, Tim Martin, on his future at the group after he took an unpaid sabbatical last year.

Away from alcohol, there could finally be a breakthrough in the long-running saga at supermarket group Somerfield, with hopes rising that bids might be lodged this week - months after news of takeover discussions first emerged.

Two consortiums are vying for the £1.1bn prize. The first consists of property tycoon Robert Tchenguiz, Apax Partners and Barclays Capital; the second is made up of London & Regional, the property company controlled by the Livingstone brothers, and Nomura.

Extensive due diligence has been carried out, though market gossip has, at different times, accused both sides of not having the financing in place. But well-placed sources say the bids are now nearly ready and could be made as early as this week.

Besides corporate deals, it is a busy week for earnings releases. Among these is Signet, the jewellery group, which announces its second-quarter results on Wednesday. Signet has benefited from the strong performance of its US businesses, which has offset weakness in Britain where it owns Ernest Jones and H Samuel.

Another retailer in the news will be Matalan, which delivers an update on Wednesday. The City expects that trading conditions will have remained difficult at the UK's largest discount clothing retailer, and there could be further information on job cuts, say analysts, as the company looks to shave £15m from its costs.

Also delivering a trading update is Whitbread, the owner of Costa Coffee, which last week revealed plans to open more than 300 coffee outlets in India. But analysts expect the outlook to be subdued at Whitbread, whose strong share performance this year has been fuelled by speculation that private equity firms may look to buy it.

In an active week for chains, Rank Group, the owner of the Hard Rock Café, releases results on Friday. Most interest will concern the company's plans to offload its Deluxe Media DVD business as it focuses on gambling and the Hard Rock Café.

It will be a busy week in media stocks as well. Regional newspaper publisher Johnston Press is releasing its interim results on Wednesday, and analysts will be looking for an update on trading in June, July and August. There are concerns that advertising conditions may have deteriorated further.

Another media company reporting is Metal Bulletin. It said in May that trading "remained strong", helped by buoyant market conditions.

Meanwhile, text-messaging software group LogicaCMG releases interims on Wednesday, with analysts expecting first-half orders to have risen by 50 per cent, although there are concerns about its UK business.

A number of mid-sized companies are reporting. Bunzl, which sold its cigarette-filter business Filtrona earlier this year, brings out interims on Tuesday. In a trading update in late June, it said that trading conditions in the UK and Ireland were "satisfactory".

One company expected to report strong revenue growth is Serco Group, one of the Ministry of Defence's biggest contractors.

In a busy week, others reporting include property company Hammerson and the Dublin-based cement maker CRH.

Away from earnings releases, economists will be interested in the Bank of England's latest data on both mortgage lending and consumer credit for July. Economists will watch the data over the coming months to see whether the cut in interest rates has provided a boost to borrowing levels.

CALENDAR

Tomorrow 29

UK: Results: none scheduled - bank holiday.

Tuesday 30

UK: Results: (interim) Bunzl, Filtrona, Hammerson, Mears Group, Metal Bulletin.

Wednesday 31

UK: Results: (I) Serco, Logica, Johnston Press, Costain Group; (second quarter) Signet; (trading update) Matalan.

Thursday 1

UK: Results: (final) Diageo; (I) Amec, BBA Group, Rathbone Brothers; (trading update) Whitbread.

Friday 2

UK: Results: (F) JD Wetherspoon; (I) Rank Group.