In the crucial Christmas trading period, Marks & Spencer (M&S) reported a mixed performance, with strong sales of its core grocery items offset by a decline in clothing and homeware. The company’s boss, Stuart Machin, revealed that the high street stalwart is working to “reshape” its strategy as it navigates an uncertain consumer environment.
M&S saw a 5.6% rise in food sales at established stores during the three months to 27 December, while clothing sales fell by 2.9%. Total sales rose by 3.3% to £4.15bn, excluding the addition of its Ocado joint venture, which M&S has now started reporting on.
The company said the poor Christmas fashion sales were linked to the “long tail impact” of last year’s crippling cyber-attack, which forced it to halt online orders for more than six weeks. M&S also cited “fragile consumer confidence and milder weather” as factors affecting its non-food business.
Despite the challenges, Machin said the food business had gained market share, with strong sales of core grocery items, new products, and upgrades to in-store bakeries and delis. Sales at the company’s online grocery specialist, Ocado, increased by 13.7%, with the number of items ordered jumping by 10.7% and the number of orders rising by 11%.
The mixed performance adds to fears that fashion retailers have experienced a tough autumn and winter, with mild weather and a squeeze on household budgets due to high energy and food bills. M&S is also thought to have lost out to rival Next, which recorded bumper sales over Christmas, partly thanks to its slick online service.
In response, M&S said it would “accelerate the reshaping strategy” under which it has been closing and moving stores that contain clothing and adding more space for food. The company now has around 230 full-line stores, which contain clothing and food, and almost 800 food-only stores.
Machin, the chief executive, said the non-food business was “getting back on track as we work through the tail end of recovery” from the cyber-attack. The company remains focused on adapting to the changing consumer landscape and weathering the ongoing economic challenges.
