M&S sales slow as retail outlook darkens

Revenue growth at Marks & Spencer's UK operations has slowed to 0.5% while the latest report from the British Retail Consortium points to worryingly weak retail sales in the run-up to Christmas.

M&S: Christmas 2011 campaign starring The X Factor finalists
M&S: Christmas 2011 campaign starring The X Factor finalists

The figures from M&S reveal the retailer's growth fell from 2.7% in the second quarter of the year to 0.5% in the third quarter.

On a like-for-like basis revenues were down 0.7% in the third quarter.

The wider retail picture at the start of the fourth quarter is worsening, according to the BRC. Its October Retail Sales Monitor report showed like-for-like revenues were down 0.6% from October 2010.

Stephen Robertson, BRC director-general, said the basic weakness of consumer confidence and demand was "worrying this close to Christmas".

Closer examination of M&S' results reveals food grew at 2.8% in the third quarter but the rest of its business fell 1.9%. International revenues were up by 10.1%.

Pre-tax profits for the 26 weeks to 1 October dropped 8.1% year on year from £348.6m to £320.5m, despite revenue growth of 2.3% to £4.7bn.

M&S has revamped its general merchandise offering, relaunching all its clothing sub-brands and introducing furniture from designer Terence Conran.

It claims it has maintained its market share of clothing and food according to data from Kantar Worldpanel.

Marc Bolland, M&S chief executive, said: "In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.

"We have a very exciting Christmas product offer for our customers with more innovation and choice than ever before."

The retailer launched its festive ad campaign on Sunday, featuring 'The X Factor finalists.


Become a member of Campaign from just £46 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk ,plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content


1 Why creative people have lost their way

What better way to kick off the inaugural issue of Campaign's monthly print offering than with another think piece on the current failings of our industry, written by an embittered, pretentious creative who misses "the way things used to be"...


1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).