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Marks and Spencer food sales grow market share

Published:  08 April, 2016

Sales of clothing and homeware at Marks and Spencer continued to fall in the fourth quarter, but the food and drinks section continues to be a saving grace for the high street stalwart.

Sales of clothing and homeware at Marks and Spencer continued to fall in the fourth quarter, but the food and drinks section continues to be a saving grace for the high street stalwart.

The company's earnings released yesterday (April 7) show the food and drinks side of the business is gaining traction with sales growth of 4% compared to the third quarter, although like for like (LFL) sales remained flat.

Meanwhile, figures show that the clothing and homeware side of the business is still struggling, with LFL sales dropping 2.7% in the quarter to March 26 - although this was better than the 3.5% fall anticipated.

Steve Rowe, the store's new chief executive, said that despite the 4.3% market share growth for food, the store's performance was "unsatisfactory" on both sides of the business.

He said: "We had a mixed performance in the final quarter of the year. Our food business once again outperformed the market by 3.5% pts. Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do."

The figures were the first to be released since Rowe, previously M&S' executive director of general merchandise, took over from Marc Bolland on Saturday (April 2).

Connor Campbell, a senior market analyst at Spreadex took a closer look at the figures.

He said: "With the economic calendar looking a bit threadbare Marks and Spencer stepped into the spotlight today, revealing its first statement of the Steve Rowe-era. Investors showed a willingness to cut the new CEO, who only took over at the start of the month, some slack, the stock rising around 0.5-1% as Rowe blasted the company's LFL 2.7% drop in clothing sales as 'unsatisfactory'.

"Just as worryingly, food sales - Marks and Spencer's perpetual silver lining -unperformed analysts' forecasts, coming in flat for the 13 weeks to March against the 0.3% growth expected.

"Yet, as mentioned, investors reacted to this news relatively well, seemingly buoyed by the Bolland-less nature of the company's latest update and the (very) slight signs of a turnaround in the clothing division (that 2.7% fall was less than half of the decline seen last quarter)."

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