M& S sees sales suffer a blow from pandemic
Bosses highlight trading challenges
BOSSES AT Marks & Spencer have warned that near- term trading remains very challenging after the pandemic delivered a blow to the company’s sales performance.
Sales in the three months to December 26 fell 7.6 per cent on a like- for- like basis, with the food division growing 2.6 per cent, but clothing and home sales dropped 24.1 per cent.
The national lockdown in England hit particularly hard, with both food and non- food sales down 4.5 per cent and 40.5 per cent respectively. Online sales were strong – including a new tie- up with Ocado to offer grocery deliveries for the first time – and shoppers were keen on buying sleepwear and leisurewear as they stayed indoors.
The chief executive Steve Rowe also warned that, despite the UK signing a free trade agreement with the EU, new rules and regulations are set to “significantly impact” its overseas ventures in Ireland, the Czech Republic and France, although he insisted the company is “actively working to mitigate” the issues.
However, he said that, in spite of the Brexit and Covid knocks, M& S had recorded a “robust” Christmas trading period.
M& S saw strong sales of goods such as champagne and sparkling wine.
He added: “More importantly, beneath the Covid clouds, we saw a very strong performance from the food business, including Ocado retail, and a further acceleration of clothing and home online.”
Looking forward, Mr Rowe said: “Near term, trading remains very challenging, but we are continuing to accelerate change under our Never The Same Again programme to ensure the business emerges from the pandemic in very different shape.”
On the food division, the retailer saw mixed results, with food- on- the- go sales dropping in towns and city centres as office workers stayed at home.
But there were strong sales in the four weeks leading up to Christmas – up 8.7 per cent – particularly at large retail park and Simply Food stores, which have remained open throughout as “essential” retailers.
M& S added the clothing and home division has been repositioning its ranges and the 46.5 per cent fall in in- store sales was partially offset by 47.5 per cent growth in online sales.
Mr Rowe also said in a call with journalists that since the national lockdown in England and Scotland announced on Monday, the company has seen absences double in the past week – particularly in the South East of England.
He said: “The absence rate across the country is just under 10 per cent, but there are spikes in that.
“When we see Covid in any one area, you tend to get a cluster of spiking. We’ve got about 10 per cent ( absences) and about 4 per cent of people are isolated due to contact.”