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M&S hit by poor Christmas sales M&S hit by poor Christmas sales
(20 minutes later)
Retailing giant Marks and Spencer has reported a fall in sales over the key Christmas trading period, adding to signs of slower UK consumer spending.Retailing giant Marks and Spencer has reported a fall in sales over the key Christmas trading period, adding to signs of slower UK consumer spending.
UK like-for-like sales fell 2.2% in the last three months of 2007, M&S's worst quarter for more than two years. UK like-for-like sales fell 2.2% in the last three months of 2007, M&S said. Sales of clothes and homeware declined 3.2%, while food sales dropped 1.5%.
Sales of clothes and homeware sales were especially hard hit, falling 3.2%, while food sales dropped 1.5%. It was the company's worst performance for more than two years, and M&S shares slumped 17% to 420 pence on the news.
M&S said trading conditions were "more challenging" in November and December and would remain tough in 2008. M&S said trading conditions would remain tough in 2008.
In contrast to its poor results at home, however, M&S's international sales rose 15.1%.
Shares in the firm fell 17% soon after the announcement to 420p.
SlowdownSlowdown
Other retailers have also been hit over Christmas as consumers pull back their spending.Other retailers have also been hit over Christmas as consumers pull back their spending.
The High Street boom is over Robert Peston, BBC business editor Read Robert Peston's blogSee M&S sharepriceThe High Street boom is over Robert Peston, BBC business editor Read Robert Peston's blogSee M&S shareprice
On Monday, the British Retail Consortium said UK retailers had seen the slowest sales growth in December for three years, with sales up by just 0.3% year-on-year.On Monday, the British Retail Consortium said UK retailers had seen the slowest sales growth in December for three years, with sales up by just 0.3% year-on-year.
Talking to the BBC, M&S chief executive Sir Stuart Rose said the UK High Street "has definitely slowed up". Talking to the BBC, M&S chief executive Sir Stuart Rose said the UK High Street "has definitely slowed up" and conditions in the clothing market were tougher than they had been for 10 years.
But M&S said that unlike other shops it had not discounted heavily to shift its stock. But he said that unlike other shops, M&S had not discounted heavily to shift its stock.
"We did not discount in the run-up to Christmas," Sir Stuart said."We did not discount in the run-up to Christmas," Sir Stuart said.
"Stock levels were well controlled over the period. We had a strong start to the Christmas Sale and sale stocks have now cleared," he said."Stock levels were well controlled over the period. We had a strong start to the Christmas Sale and sale stocks have now cleared," he said.
Website sales were particularly strong, adding 78% during the quarter.Website sales were particularly strong, adding 78% during the quarter.
Sir Stuart said conditions in the clothing market were tougher than they had been for 10 years - but added that certain sectors like food had improved their outlook. And in contrast to its poor results at home, M&S's international sales rose 15.1%.
At the same time, certain sectors like food had improved their outlook.
Looking ahead, the firm said its plan to update its stores had been applied to 70% of its shops adding that a "strong pipeline of new space for 2008 and beyond" was planned.Looking ahead, the firm said its plan to update its stores had been applied to 70% of its shops adding that a "strong pipeline of new space for 2008 and beyond" was planned.