Marks & Spencer Sales Slump Despite Record Christmas Fortnight
By Martin Baccardax | January 10, 2013 8:50 AM EST
Marks & Spencer, Britain's top clothing retailer, posted a sixth consecutive slump in quarterly sales after a disappointing Christmas trading period.
Total sales for the 13 weeks ending on 29 December rose 0.3 percent, the company said in a statement on its website after the close of London trading Wednesday. However, like-for-like sales, which measure trade from stores opened for at least a year, fell 1.8 percent overall and a steep 3.8 percent in the group's general merchandise unit. Food sales grew 0.3 percent, the company reported, less than analysts had anticipated.
"Our Food business has performed very well with record sales over the key Christmas trading period," said CEO Marc Bolland. "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."
Food sales, however, continued to support the group's top line, with more than £330m - a company record - sold over the Christmas fortnight.
"Our strategy to focus on innovation worked, with over 700 new products launched during the quarter giving customers all the ingredients for a special M&S Christmas," the company said.
The figures come after the research group Kantar Worldpanel said overall grocery store sales in Britain grew 3.2 percent in the 12 weeks ending 23 December, in a report published on its website Tuesday, with the strongest growth coming from the discount and premium ends of companies product ranges.
M&S rival Debenhams earlier this week posted record December sales as better promotions and a surge in online shopping lifted turnover at Britain's second-largest department store chain.
Sales for the 18 weeks ending on 5 January rose 2.9 percent, the company said in a statement published Tuesday on its website. December sales, which the company records during the five weeks prior to 5 January, rose 5 percent to a company record. Online trading, the group said, surged 39 percent over the full 18-week period.
"We expect the pressure on consumers' disposable incomes to continue in 2013," M&S said in the statement. "As a result we remain cautious about the outlook for the year ahead." The group will deliver fourth quarter sales data on 11 April.
The British Retail Consortium said Tuesday that like-for-like sales across the country in December rose a modest 0.3 percent last month, with the lobby group describing the Christmas sales season as "underwhelming" owing to muted consumer confidence and an overall lack of optimism from British shoppers.
Online sales, however, remained the bright spot for UK retailers, rising 20 percent last month, the BRC said, from an annual monthly average of around 12 percent.
The accountancy and consulting group BDP LLP said Monday that like-for-like sales increased by 1.9 percent for Britain's larger retailers in the five weeks that ended on 29 December, thanks to a wave of online shopping and bargain hunting.
The group's annual High Street Sales Tracker said online sales surged 30.9 percent from the same period last year, while footfall on the weekend before Christmas was up 22 percent.
M&S shares closed at 371 pence each Wednesday, a 0.38 percent advance on the session. The shares are risen nearly 18 percent in the past year.
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