M&S sales fall over Christmas quarter as lockdown hammers clothing division
Marks and Spencer (M&S) saw their sales slip over the quarter leading up to Christmas as new lockdown restrictions cast a shadow over the normally lucrative season.
The high street stalwart said that total sales fell 8.2 per cent to £2.5bn in the three months to 26 December.
Shares in the retailer fell 1.9 per cent on the back of the announcement.
November’s lockdown did the most damage, with total sales down 19.5 per cent over the month. Clothing sales, which dropped 25.1 per cent to £787m overall, fell 40 per cent over the same month.
An impressive performance by M&S’s food division, which saw sales grow 2.2 per cent to £1.7bn, was a rare shaft of light for the firm.
The growth is especially impressive given the lack of people buying food “on the move”. M&S added that its partnership with digital food retailer Ocado had continued its recent positive performance.
Chief executive Steve Rowe praised the grocer for a “robust” performance in “impossible conditions”.
The results come at the end of a challenging year for M&S, which has suffered due to its higher exposure to general items beside food than other supermarkets.
There could be more trouble ahead for the firm, which warned that as a result of Brexit some of its products would now face tariffs when exported to Europe.
M&S said that this could “significantly impact” its operations in Ireland and the Czech Republic, as well as its franchise business in France.
Earlier this week photos of empty food shelves in its stores in Paris were widely shared on social media.
And Arlene Ewing, investment manager at Brewin Dolphin, said that the new lockdown would “weigh heavily” on the company.
“Strategic action has been required for some time at this side of M&S and, while a greater shift to online is positive, it won’t be a panacea in itself.
“Food – specifically Ocado Retail – remains the bright spot and main driver of growth for M&S.
“Nevertheless, investors will likely be keeping a close eye on news around the business’s significant lease obligations and progress on its transition programme in May’s update.”