THE winners and losers of the retail sector will be highlighted next week when the City gets figures from major players including Next, Morrisons and B&Q.

Supermarket Morrisons is likely to follow Tesco's lead and slash its dividend as shareholders count the cost of the industry's price war.

Tesco and Bradford-based chain Morrisons have been the major casualties in the recent shake-up of the sector, with the latter's like-for-like sales likely to be down by a hefty 6.9 per cent when it reports half-year results on Thursday.

Pre-tax profits are forecast to be down by around 50 per cent to £174 million, while brokers think the grocer's dividend will be cut in half to 6.5p over the year.

Speculation about a dividend cut at Morrisons intensified after Tesco announced it would cut its half-year payout by 75 per cent in a move saving an initial £280 million.

Morrisons and Tesco have seen the heaviest sales falls among the big four supermarkets, as the sector has been squeezed by discounters such as Aldi and Lidl.

Back in March Morrisons chief executive Dalton Philips launched a £1 billion investment in price cuts over the next three years.

It followed this up in May with an "I'm Cheaper" campaign, which cut prices across 1,200 products by an average of 17 per cent.

But the benefits of these moves are yet to feed through to the grocer's trading.

It plunged to an annual loss of £176 million for the year to February 2 and recently announced it was slashing 2,600 jobs as part of a drive to modernise the way its stores are managed.

Fashion retailer Next is expected to extend its lead over rival Marks & Spencer when it posts a strong set of half-year results next Thursday.

The group said in July it expects sales for the first six months of the financial year to jump 10.7 per cent, compared to a year ago. It said its better-than-expected revenues were driven by its Next Directory and increased store sales.

Next overtook its more-established rival M&S with a £695 million profits haul earlier this year and said it was now on course to lift this to between £775 million and £815 million in the current financial year.

The City expects profit at the owner of B&Q to fall at its half-year results next Wednesday, with the group seemingly unable to take full advantage of the housing market recovery.

Kingfisher, which trades in nine countries in Europe and Asia, is expected to post an adjusted profit before tax down 5 per cent at £348 million compared to a year ago due to softer sales in France and Poland.

Added to this the group said recently that revenues at B&Q in the UK were down by 3.2 per cent on a like-for-like basis in the 10 weeks to July 12.