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Marks & Spencer general merchandise sales continue to struggle

Thursday January 7th 2016

Marks & Spencer has said its general merchandise trading was disappointing in its third quarter after like-for-like sales in the category dropped by 5.8%.

However, the food category achieved its “best ever” Christmas with a like-for-like sales uplift of 0.4% across the quarter and a 17% increase in the retailer’s key Christmas week.

The results for the 13 weeks to 26 December mean that UK total sales fell by 0.3% while like-for-like sales declined by 2.5%.

The food business has now delivered 25 consecutive quarters of like-for-like sales growth. During the period, the business launched over 800 new products including 400 unique seasonal lines.

Marks & Spencer said it faced “challenging” market conditions in general merchandise and fell short on availability. It held back from the heavy discounting in the period especially in the run-up to Christmas. While this had an adverse impact on sales, it enabled the retailer to protect gross margin, which is now expected to come in at the top end of the guided range.

It added: “We acknowledge there is more to do to address the disappointing GM sales, and the new team are focused on the three key priorities of availability, ranging and design.”

Online sales at M&S.com rose by 20.9% with continued improvement in traffic and customer experience. During the quarter, the retailer launched its new loyalty members club, Sparks, which over 3.3 million customers have joined since the launch 11 weeks ago.

Marks & Spencer said its international business continued to face a challenging macro-economic environment, particularly across its Middle East franchise region. However, sales in the retailer's owned businesses improved with a strong performance in key markets such as India. This meant that international sales grew by 2.9% in the period.

The retailer has also announced that Marc Bolland has informed the board that, after six years in the role, he wishes to retire as chief executive in 2016. He will be succeeded by Steve Rowe, who is currently executive director of general merchandise.

 


Tags: retail