Marks & Spencer Reports Lower Than Predicted Growth in Food Sales for Q4

Covering the 13 weeks from the start of 2012 till the end of March, the company achieved a growth in like-for-like food sales of 1 percent, falling short of the expected 1.6 percent growth in the sector that the company had predicted.

17 April 2012 --- The retailer Marks & Spencer, often referred to as the bellwether for British retail, achieved less than predicted sales across its stores according to its Q4 Trading Statement.

Covering the 13 weeks from the start of 2012 till the end of March, the company achieved a growth in like-for-like food sales of 1 percent, falling short of the expected 1.6 percent growth in the sector that the company had predicted.

The fourth quarter outcome included a 2.8 percent fall in general merchandise, mainly clothing, like-for-like sales against consensus forecasts of increases of 0.2 percent.

Shares in M&S fell nearly 3 percent after it announced sales at its stores had fell 0.7 percent.

The company was optimistic that they would meet expectations for 2011/12 profit thanks to cost savings.

Chief Executive Marc Bolland evaluated the performance: “In Food, we performed well in a very competitive market and against tough comparatives. We continued our focus on innovation launching c.500 new products in the quarter. Our promotions provided our customers with great value solutions for special times of the year such as Valentine's Day Dine In, which was our record one to date. We held the highest share of the market for healthy eating through the quarter with our Simply Fuller Longer range as the market leader.

“Marks & Spencer continued to make progress in a challenging market. Group sales grew by 0.8%, and UK sales grew by 1.2%.

“Direct had another strong quarter with sales up 22.8% through a number of new initiatives delivering an improved customer shopping experience.

“Strategic international markets, including India and China, delivered double digit growth but we continue to experience macro-economic pressure and restructuring in some parts of Europe.

“We have continued to manage costs tightly, and are confident of delivering full year profits in line with expectations. While the short term trading outlook continues to be challenging, we are focused on investing in line with our plan and are making strong progress against our goal of becoming an international, multi-channel retailer.”