High street retailer Marks & Spencer (M&S) is set to scale back its ambitions plans for sales growth next week due to the depressed state of UK consumer spending, reports have suggested.
Just 18 months ago CEO of M&S Marc Bolland claimed that the business would increase its sales by £3 billion in the space of three years, but now the company is expected to confirm that it has fallen well short of its original targets.
According to This Is Money, next week‘s final results announcement from the group is expected to reveal that sales have increased just £200 million since the targets were set, meaning the retailer would need to quadruple its annual growth rate for the next to years to achieve its aim.
M&S is thought to be pessimistic about the consumer outlook however and with full-year profits now expected to be four per cent lower than last year Bolland is expected to revise his strategy.
An M&S source told This Is Money however that despite the prolonged downturn in consumer spending, the retailer is well placed going forwards to profit from the one section of society which still has a relatively large amount of disposable income – the over 45s.
“Marc is far from complacent,” the source said.
“But he sees the opportunity, along with other retailers like Debenhams, which naturally fit with the older shopper.”
During the last 13 weeks of the financial year M&S saw its UK like-for-like sales fall 0.7 per cent compared to last year, however its online trading grew 22.8 per cent annually.