Food sales drive M&S Christmas performance

Marks and Spencer reported food like-for-likes excluding VAT up 3 per cent in the third quarter to December 31, when general merchandise like-for-likes slipped1.8 per cent resulting in a 0.5 per cent uplift at group level.

Total UK sales, excluding VAT, advanced 1.8 per cent. Food was up 4.5 per cent and general merchandise was down 0.8 per cent. Group sales rose 2.4 per cent in the period.

The retailer expects conditions to remain challenging and said that the extent of promotions would result in lower gross margin than expected. However extra savings as a result of tight cost management will offset the margin hit.

M&S chief executive Marc Bolland maintained that M&S had traded well in challenging conditions.

He said: “Our food business performed very strongly as customers enjoyed our new and traditional Christmas products.

“In clothing our focus was on offering our customers real value at a time when they’re managing their budgets carefully. Our trading strategy worked well, delivering a record performance in many categories including menswear and sleepwear.”

Clothing sales rose 1.1 per cent. Home sales were down 13.3 per cent, affected by the retailer’s exit from technology products.

Direct sales surged 22.4 per cent and international sales were up 8.1 per cent, reflecting continued growth in the priority markets of India and Shanghai, as well as in our franchise business.

The retailer said its new Paris flagship “had a very good start”.