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M&S sales driven by food

Marks & Spencer has posted a 2.4% rise in group sales in the 13 weeks to 31 December but warned that it expects trading conditions to remain challenging.

GENERAL MERCHANDISE

M&S sales driven by food

Marks & Spencer has posted a 2.4% rise in group sales in the 13 weeks to 31 December but warned that it expects trading conditions to remain challenging.

In a trading update that included the festive period, the retailer said total UK sales rose by 1.8% and like-for-like sales by 0.5%. Food sales were up 4.5% in the period.

The company said it had attracted cash-strapped consumers through deep discounts and said the loss in profit margins would be offset by additional savings generated by ongoing tight management costs.

Sales at the M&S direct delivery business jumped 22.4% after the retailer extended its next day delivery deadline and launched its Christmas food to order service on-line, which contributed to a 12% increase in orders.

Clothing sales were up 1.1% but home sales were down 13.3%, primarily impacted by the retailer’s decision to exit technology. M&S said its key home departments performed well, and the planned roll-out of new ranges and store layout later this year would provide a step change in its Home offer.
 
International sales were up 8.1%, reflecting continued growth in India and Shanghai, as well as in the franchise business. M&S said its newly opened flagship store in Paris had started well.

M&S chief executive Marc Bollard was pleased with the results but warned of continuing tough times ahead.

Bollard said: "Marks & Spencer performed well in a challenging trading environment. Our food business performed very strongly as customers enjoyed our new and traditional Christmas products. This unique offer, coupled with our great deals, gave them more choice than ever before for a special Christmas at home.

"In light of the ongoing macro-economic uncertainty, we expect trading conditions to remain challenging. We continue to be cautious about the outlook for the year ahead. Our focus will be on offering our customers great value and quality at a time when they are managing their budgets carefully."

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