Marks & Spencer slips back into decline after just one quarter of growth
Marks and Spencer's general merchandise arm has slipped back into decline following just one quarter of growth.
The figures:
M&S' story is pretty much the same as it has been for many months.
Total sales in general merchandise were up 0.2 per cent but like-for-likes were down 0.4 per cent, reversing a solitary quarter of growth after 14 periods of decline.
Total sales in food were up 3.2 per cent, although like-for-likes were up just 0.3 per cent. This was up against the wider grocery market, however.
Online sales, which had faltered after the revamp of M&S.com, rose 38.7 per cent.
International sales were up just 0.7 per cent.
All that means group sales for the three months to 27 June were up 1.8 per cent.
Why it's interesting:
M&S has been promising a turnaround for many years now, and last quarter it seemed as though the green shoots were appearing. But the fact that GM has slipped back into negative territory, while food like-for-likes were looking uninspiring, suggests in fact the business still has a lot of work ahead.
What they said:
Chief executive Marc Bolland interpreted the figures as a sign of continued progress.
He said: “Our food business did very well in a difficult market. In general merchandise, sales were broadly level on last year and we are on track to deliver the planned increase in gross margin. M&S.com performance was very strong, with customers appreciating all the improvements to our website."
Within GM, the group added: “In a challenging and promotional quarter, we continued to focus on improving product quality and style. We remain on track to deliver the improvement in gross margin previously guided.”
What others said:
John Ibbotson of retail consultants Retail Vision said: "However you dress this up, it's still not good enough. The hard numbers show that Marc Bolland's much touted recovery in general merchandise has come off the rails once again, so it's no wonder there is shareholder dissatisfaction with his bonus.
"M&S may have increased its margins, but this is a retailer that lives or dies on the performance of its general merchandise, and the performance there is consistently poor.
"Time is running out for Bolland and no amount of free in-store collection will stop that. "As hard as it is to stomach, the one-time colossus of British retailing is now an also ran, with the likes of Next, Primark and the internet operators ripping away its clothing market share."
In short:
Having beaten analyst expectations last quarter, this is a step backwards, particularly considering the weak comparables the company is up against.