Saturday, February 29, 2020

M&S LFLs fall 1.8% over Xmas


High street retailer Marks and Spencer (M&S) has seen like-for-like (LFL) sales fall by 1.8 per cent in a disappointing Christmas, it has been announced today.

General Merchandise (GM) sales dragged overall performance down during the 13 weeks to December 29th 2012 as GM LFLs slumped by 3.8 per cent, while food LFLs recorded a slight increase of 0.3 per cent.

Food saw a 2.7 per cent rise in total sales in the period, while total GM sales fell by 2.2 per cent, resulting in a total sales increase of just 0.3 per cent across both departments.

Poor GM sales have been a habitual problem for the retailer in 2012, leading to the resignation of former GM Executive Director Kate Bostock last July.

Bostock has been succeeded by Belinda Earl, and M&S CEO Marc Bolland feels positive about the the future of the business.

Commenting on the results, Bolland said: “Our food business has performed very well with record sales over the key Christmas trading period.

“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.”

Bolland added that M&S is working towards becoming an international multichannel retailer, and that the 10.8 per cent increase in multichannel sales in the third quarter of 2012 is a positive step.

Sales from mobile devices were up by more than 90 per cent during the period, and the launch of a new e-commerce distribution centre is planned for April 2013.

Continuing financial problems in Greece and the Republic of Ireland affected international sales, but these still rose by 4.1 per cent due to good trade in India and China.

Budget cuts and rising food prices are expected to keep consumer confidence low in 2013, and Neil Saunders, Managing Director of Conlumino, was pessimistic in his predictions for the year ahead.

“For all that Marks & Spencer has talked about availability, store refurbishments and multichannel one fundamental issue remains: the clothing product and product segmentation is not right,” he commented.

“Until this is remedied it is hard to see how other changes will bear fruit.”

Saunders named a lack of empathy with core customers and a “sea of merchandise” making shopping difficult for customers as the key product issues for M&S, and commented that M&S‘s multichannel sales increase was well below overall online market growth.

“If customers are uninspired by the product, improving the number of channels they can buy through will have little impact,” he added.

Praising the retailer‘s food sales, Saunders concluded: “Despite the disappointing results M&S remains a solid player and has significant potential.

“There are plans in place to remedy some of the issues inherent within the business, but 2013 will need to be a year of delivery and action if the company is to turn around its fortunes.”