LFL sales down in food and clothing at M&S

By Jo Gilbert

Published: 07 July, 2016

Beleaguered high street retailer Marks & Spencer has posted a 4.3% drop in total sales in the 13 weeks to July 2.

In its Q1 2016/17 trading statement, Marks & Spencer group plc's results painted a bleak picture, with like-for-like sales in clothing and home diving 8.9% - the worst results for the group in ten years.

The usually dependable food sector failed to provide a lifeboat for the high street retailer, with like-for-like sales down 0.9%, although total sales were up 4% on the previous quarter.

Connor Campbell, senior market analyst Spreadex, said: "It was an ugly first full quarter in charge for Steve Rowe, with Marks & Spencer seeing a near 9% dive in like-for-like sales, its worst decline for a decade.

"Even the usual food sector boost failed in Q1 2017, like-for-like sales in the division dropping by 0.9%. Yet it seems that investors are still willing to cut Rowe some slack, the stock reducing its near 3% fall to around half a percent as the day went on."

Chief executive Steve Rowe said the timing of Easter had had an adverse affect on 0.5% on food and 0.8% clothing and home sales growth, in addition to the shadow cast by the EU referendum.

"Our food business continues to strongly outperform a deflationary market, with LFL sales slightly down when adjusted for Easter timing," he said.

"As highlighted in May, consumer confidence weakened in the run up to the EU referendum. While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers.

"Food sales rose by 4.0% with LFL sales down 0.9% of which 0.5% was due to Easter timing. We strongly outperformed the food market and continue to leverage our volume growth to reinvest in price. New Simply Food stores continue to perform ahead of our expectations."

There was some growth in the international market, with sales up 0.7% at constant currency and rose 6.1% on a reported basis.

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