M&S has best performance in two years
MARKS & SPENCER (M&S) said yesterday that its 125th anniversary celebrations, a late Easter and the arrival of summer had all helped drive it to the best quarterly performance in nearly two years.
M&S reported a drop in UK like-for-like sales of 1.7 per cent for the first quarter, ending 27 June, compared to a drop of 4.2 per cent in the previous three months.
Like-for-like general merchandise sales were down 2.4 per cent, against a forecast drop of three to five per cent, while food sales on the same basis were down 0.5 per cent versus an expected decline of 0.5 to 4.2 per cent.
Aside from beating analyst expectations the result marked the retail giant’s best performance since the second quarter of 2007/08.
M&S, which has over 600 stores in the UK and 285 abroad, said that consumer confidence appeared to be stabilising, but it remained cautious about the future.
“We all know that there’s more taxation coming in next year. We all know that unemployment will still go up, but maybe by less. We all know that VAT is going up,” said M&S chairman Sir Stuart Rose.
“I think people are less un-confident, but they’re certainly not saying we’re through this, and we’re not through this”.
M&S admitted that it was slow to respond to the downturn, particularly in its upmarket food business, but has since made changes, introducing new products, price cuts and promotions.
Total sales, including those for new or expanded stores, were up 1.7 per cent in the UK – with growth of 1.2 per cent in general merchandising and two per cent in food – and 2.9 per cent for the whole group.
The firm’s international sales were up 15.9 per cent and sales over the internet grew by 28 per cent.
Rose said the board’s position on succession — that it will appoint a new chief executive next year and that Rose will step down as chairman by 31 July 2011 — had not changed.