M&S says revamp on track despite more declines in sales
Marks & Spencer, which has 18 stores in Northern Ireland, has insisted its overhaul remains "on track" despite concerns over further falls in clothing sales and a worse-than-expected performance in its food halls.
The retail giant said like-for-like sales fell 1.2% in its clothing and home division over the 13 weeks to July 1, while food sales dropped 0.1%.
The company recently announced plans to open a new food store in Carrickfergus, Co Antrim - its 19th in the province - and is also relocating its Newry store from the city's Buttercrane Shopping Centre to the Quays.
Chief executive Steve Rowe said sales in its clothing arm were moving in the "right direction" as the performance marked an improvement on the 5.9% tumble seen in the previous three months.
The timing of Easter helped narrow sales falls, but the group's decision to axe a raft of promotions and clearance sales took its toll.
M&S shares fell 5% as retail experts raised concerns over the food sales decline.
While it was better than the 2.1% fall seen in the previous quarter, it dashed expectations of a sales rise and came despite a boost from Easter and surging inflation.
M&S - which also held its annual general meeting for shareholders in London yesterday - said this year's later Easter flattered clothing and home sales by around 0.6%, while it helped lift food sales by around 0.7%.
Food sales also remained in decline despite surging inflation, which M&S said was running at around 2% in its first quarter.
But Mr Rowe told investors the group was "seeing the results of our plan in action" as efforts to cut back on promotions helped full-price clothing and home sales jump 7% higher in its first quarter.
He also said part of the fall in food sales came as it opened Simply Food stores near existing shops, which impacted some sales, while the group also cut back on promotions.
He said: "We know there's a lot more to do, but in the context of the market, we are satisfied we are on track and that our plan to grow M&S is the right one."
He added clothing and home sales were expected to begin turning positive towards the end of the year.
M&S joined rivals in warning over tough conditions on the high street as it said consumer confidence had taken a turn for the worse in recent weeks.
Mr Rowe said the mood among shoppers on the high street was volatile, with consumers "very much shopping for now and cautious with their spend".
Laith Khalaf, senior analyst at Hargreaves Lansdown, branded the first quarter food sales fall a disappointment.
He added there was "not too much to cheer about" as clothing sales also continued to fall.
Outgoing M&S chairman Robert Swannell told investors the group's overhaul would cause inevitable "short-term pain". In his last AGM before handing over the reins later this year to former Asda chief Archie Norman, he said the overhaul was necessary and that M&S needed to end the "damaging cycle of promotions and sales". M&S axed 27 promotions in the quarter and started its summer clothing and home sale yesterday with "significantly" less stock to discount.