Fears about the profit outlook for 2012 will loom large when top European retailers including Carrefour and Metro post fourth-quarter sales next week amid signs of growing consumer caution and after a shock warning from Tesco Thursday.

Disposable incomes are being squeezed across much of Europe by rising prices, muted wages growth and government austerity measures. The euro zone debt crisis has also hammered confidence and the signs are that where there have been increases in Christmas sales, this has been due to snow-disrupted comparable figures from the year before and to margin-crushing discounts.

Weak consumer demand has particularly hit sellers of discretionary, high price goods like furniture and electricals.

It has also coincided with big changes in shopping habits, further polarising the effects for different retailers. Out is the big trip to out-of-town hypermarkets in favour of more frequent visits to local supermarkets. And any retailer without a strong online business is at a disadvantage.

Carrefour , Europe's biggest retailer, is in the eye of the storm, as it is heavily exposed to some of Europe's weakest consumer markets, like debt-laden Spain and Italy, and makes most of its sales through hypermarkets.

The stakes could not be higher when the French group reports fourth-quarter sales Thursday. After a staggering six profit warnings in little more than a year, Chief Executive Lars Olofsson's future appears to be hanging by a thread.

A source told Reuters in November the group was looking for a new CEO and retail veteran Georges Plassat had turned the job down. Carrefour, however, denies a search is on.

Analysts are eager for an update on the group's new hypermarket format, Carrefour Planet, which is the lynchpin of Olofsson's turnaround plan, though they might have to wait for full-year results in March. Some believe converted stores are not performing as well as hoped and their upmarket feel is ill suited to a tough consumer backdrop.

Friday, Carrefour declined to comment on a report by retail industry web magazine LSA.fr it was considering a reorganisation within its French hypermarkets and could replace the head of that business, Guillaume Vicaire.

In August Carrefour, the world's No.2 retailer by sales behind U.S. group Wal-Mart , announced a plan to cut prices in France in a bid to reverse falling market share. But market research data suggest little improvement so far.

Some analysts think its latest guidance for a 15-20 percent drop in 2011 operating profit could be at risk, and that the consensus view for profit to improve to 2.3 billion euros in 2012 from 2.2 billion in 2011 is too optimistic.

The prospects of Carrefour beginning a period of sustained profit recovery in 2012, as recessionary conditions intensify in many of the group's markets, is extremely remote, UBS said.

Carrefour's fourth-quarter sales will fall 0.3 percent to 24.4 billion euros, according to a Reuters poll of 8 analysts. Sales at French hypermarkets open over a year are seen down 5 percent excluding fuel, below a 4.6 percent drop the quarter before and the worst showing since the third quarter of 2009.

Monday, smaller rival Casino is also expected to report a deterioration in its French performance, which some analysts think could jeopardise its target for flat earnings at home in 2011 and lead to downgrades for 2012.

But its stronger emerging markets are tipped to drive a 14.7 percent increase in fourth quarter sales.

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EU retail sales/confidence: http://link.reuters.com/tyb25s

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WINNERS ARE LOSERS

Germany's Metro , the world's No.4 retailer which reports fourth-quarter sales Tuesday, got much of its bad news out of the way in a December 6 profit warning.

Figures from Germany's retail industry association suggest festive sales held up better than feared.

But with a big exposure to discretionary goods through its Media Markt/Saturn electronics business and its Kaufhof department stores, as well as operations across Europe, some analysts feel 2012 profit forecasts may still be too optimistic.

We do think as much as 8 percent of further earnings downgrades (for Metro) exists versus consensus for 2012 earnings, JP Morgan Cazenove analysts said.

Metro's fourth-quarter sales are tipped to fall 2 percent to 19.3 billion euros in a Reuters poll.

Investors will be looking for an update on the sale of Kaufhof, which may lead to a special dividend.

Analysts expect Dutch grocer Ahold to report brighter news in its fourth-quarter figures Thursday, helped by a dominant position in its home market and its strength in the more affluent northeast of the United States,

Its sales are tipped to rise 5.4 percent to 7.36 billion euros in a Reuters poll. However, forecast increases of 2.6 percent and 3.2 percent in Dutch and U.S. underlying sales respectively would both mark slowdowns from the third quarter.

Luxury brand Burberry is likely to show the wealthiest shoppers have been relatively unscathed by economic turmoil when it publishes third-quarter sales Tuesday.

Analysts expect a 21 percent jump in revenues to just under 570 million pounds, according to a company poll.

Electronics groups Dixons and Kesa , in contrast, are likely to have been hit hard.

Analysts expect Dixons to post a 4-6 percent drop in group underlying sales Tuesday, and Kesa to report Thursday falls at both its Darty chain in France and particularly its British chain Comet, which is being sold.

(additional reporting by Victoria Bryan in Frankfurt and James Davey in London; Editing by Sophie Walker)