Food promotions help M-amp;S taste surprise success
Retail giant Marks -amp; Spencer yesterday posted a slowdown in sales in the first three months of the year but surprised the City with unexpected overall growth.
The retailer said big-impact promotions saw growth in food sales offset a decline in general merchandise, such as clothing, as UK like-for-like sales in the 13 weeks to April 2 grew at a better-than-expected 0.1%.
The results come amid a poor run for UK retailers - after HMV, Next and Currys owner Dixons Retail all reported difficult trading in the period since Christmas. Shares were up 5% after the company published its trading update yesterday.
A decline in total like-for-like sales of 2.5% was forecast by analysts, with a particularly severe drop of 6.2% predicted for general merchandise.
But M-amp;S has continued its bullish run, with like-for-like sales consistently beating expectations earlier in the financial year.
The retailer said the slowdown in sales in the fourth quarter, compared to 2.8% like-for-like growth in the third quarter, was partly down to tough comparatives a year ago.
In food, like-for-like sales were up 3.4% and market share was up 0.1% to 3.8%, driven by the chain's promotions, such as the Dine In offer, popular on Valentine's Day and Mother's Day.
M-amp;S is expected to report pre-tax profits of £709m, a 12% rise compared to the previous year, in its full-year results on May 24.