Marks & Spencer reports fall in non-food sales over Christmas
Marks and Spencer has reported a 1.8% drop in like-for-like sales in its Christmas trading period after the retailer was hit by poor sales of general merchandise.
In the 13 weeks to 29 December 2012, food sales increased by 0.8% on a like-for-like- basis while general merchandise sales fell by 3.8%.
Total UK sales in the quarter increased by 0.3% with total food sales up 2.7% and total general merchandise sales down 2.2%. Group sales rose by 0.6%.
Commenting on the figures, Marc Bolland, chief executive, said: “Our Food business has performed very well with record sales over the key Christmas trading period. Our General Merchandise performance is not yet satisfactory but we are confident that the steps being taken by the new management team will address this.
Never Miss a Retail Update!“Our plan is to transform Marks & Spencer from a traditional UK retailer to an international multi-channel retailer. We are making good progress against this plan.”
Over the two key Christmas trading weeks, M&S saw record food sales of nearly £330 million, boosted by 700 new products launched during the quarter.
Like-for-like sales for the 14 weeks to 5 January, which included New Year’s trading on a comparable basis, were up 0.9%.
Bolland said that the general merchandise business faced a challenging and highly promotional market. During the period, the business offered customers fewer but more targeted promotions, with a focus on full price sales thereby protecting gross margin.
He added that the new team brought in to oversee clothing was now managing stocks tightly, “resulting in slightly less stock into the Christmas sale, and a clean position at the end of the quarter”. The spring/summer collection, which arrives in stores this week, had been “well received by the fashion press”.
The retailer’s multi-channel business performed well, despite tough comparatives, with sales up 10.8%. Sales from mobile devices were up over 90% and Christmas Food to Order rose by 5%.
Key international markets in India and China continued to trade well during the quarter, although international sales overall were impacted by currency translation as well as by continued macro-economic weakness in the Republic of Ireland and Greece and the on-going restructuring of the retailer’s Central European business.
Regarding the outlook, M&S said: “We expect the pressure on consumers’ disposable incomes to continue in 2013. As a result we remain cautious about the outlook for the year ahead. Our plan is to transform Marks & Spencer from a traditional UK retailer to an international multi-channel retailer. We are making good progress against this plan.”
