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M&S grocery profits rise give taste for 200 new stores

By John Mulgrew

Published 21/05/2015

Marks & Spencer posted a profits rise, but missed expectations for general merchandise, including clothing
Marks & Spencer posted a profits rise, but missed expectations for general merchandise, including clothing

German supermarket giant Lidl is continuing to rapidly grow its market share in Northern Ireland, latest figures have shown.

Sales have risen once again, increasing by almost than 19% in the 12 months since April last year, according to the Kantar Worldpanel figures.

But Northern Ireland's biggest supermarket, Tesco, has seen its sales drop by almost 2% in the same period.

And the latest figures for Northern Ireland supermarkets come as Marks & Spencer posted its first profits rise in four years.

It said pre-tax profit rose to £661.2m in the year to March 28.

That was up 6% on the £623m it made a year earlier.

And it was its food business keeping the retailer in the black, with that arm of the business described as "outstanding".

It posted 0.6% like-for-like sales growth despite the pressures facing the wider grocery sector where prices are falling under pressure from discounters such as a Lidl.

It also has big plans to expand its Simply Foods across the UK with 200 new stores, as a result of its booming performance.

But yesterday it would not be drawn on how many of those would be in Northern Ireland.

Marks & Spencer admitted it missed expectations for its struggling general merchandise division - which includes clothing.

It pinned the blame for its disappointing clothing sales performance for the year partly on the autumn weather ­- which it said was the third warmest on record-hitting sales of coats and knitwear.

But the final quarter of the year saw the division show signs of a turnaround after it posted a rise in like-for-like sales following a string of declines.

Non-food sales have taken a battering in recent years, and successive attempts to re-launch its female clothing department have been anti-climactic at best.

Earlier this year Marks & Spencer's executive director of food Steve Rowe, told the Belfast Telegraph the company's Lisburn/Sprucefield store was the single largest food hall for takings in the UK .

Its Forestside store in Belfast also ranks in the top 10 of its food halls across the UK.

And Belfast has its second biggest regional market share at 8%.

It currently has eight Simply Food stores and 10 larger stores selling food and other lines.

Responding to the latest profits increase, Marks & Spencer's boss Marc Bolland said he was "tremendously enjoying" the company's growth.

And the chief executive, who has been under sustained pressure in recent years with the retailer suffering sliding clothing sales, signalled he had no intention of leaving and that tough decisions to invest in the company were paying off.

"I am tremendously enjoying the fact that we are really growing. I am totally here for the business.

"This phase, of execution, is something I am enjoying."

Mr Bolland implied that the figures were a vindication of his strategy in recent years, saying M&S would already have increased annual profits were it not for the decisions on making investments that it needed.

"We have chosen to do this the hard way.

"We have chosen to do the right investments," he said.

Mr Bolland remained cautious on business prospects, adding:

"This is a tough market, and I expect it to remain tough for the next year."

Belfast Telegraph

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