M&S sees uplift in sales

30 September 2009

Marks & Spencer has sparked hopes that the worst is over for the high street after it reported a pick-up in food and clothing sales over the past three months.

The UK's biggest clothing retailer reported a 1.9% increase in total UK sales during the 13 weeks to 26 September, with general merchandise, clothing and food all enjoying an uplift. Only home sales fell during the period, by 1.8%.

Elsewhere, group sales were up 2.7%, driven by a 30% boom in online sales and 9.6% increase in international business.

Despite the chain, which celebrated its 125th birthday this year, suffering a 0.5% fall in UK sales on a like-for-like basis, it still beat analyst expectations.

Analysts had been expecting overall like-for-like sales to be down some 1.5%, with clothing and homewares down 2.7% and food down 0.3%.

Sir Stuart Rose, chairman of M&S, says the improved performance is down to an increase in consumer confidence.

But he warns: “We continue to be cautious about the outlook. We expect 2010 to be a tough year and we will continue to run the business accordingly."

The store is hopeful, however, that Christmas will prove a busy period. It is recruiting an extra 20,000 seasonal employees to help cope with demand from shoppers.

The latest figures mark significant progress from June, when like-for-like sales came in at 1.4% - beating expectations of 3.5%. This was down from 5.9% the previous quarter.

In May, the group slashed its dividend by a third following a slump in annual profits to £604 million. New food boss John Dixon has also been cutting prices in the group's stores with around a fifth of products now labelled as wise buys.

The group will report its half-year results for the 26 weeks to 26 September 2009 on 4 November.

Shares in the group were among the heaviest fallers in the early stages of trading, down over 1% to 369.6p.

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