M&S has best performance in two years

MARKS &amp; SPENCER (M&amp;S) said yesterday that its 125th anniversary celebrations, a late Easter and the arrival of summer had all helped drive it to the best quarterly performance in nearly two years.<br /><br />M&amp;S reported a drop in UK like-for-like sales of 1.7 per cent for the first quarter, ending 27 June, compared to a drop of 4.2 per cent in the previous three months.<br /><br />Like-for-like general merchandise sales were down 2.4 per cent, against a forecast drop of three to five per cent, while food sales on the same basis were down 0.5 per cent versus an expected decline of 0.5 to 4.2 per cent.<br /><br />Aside from beating analyst expectations the result marked the retail giant&rsquo;s best performance since the second quarter of 2007/08.<br /><br />M&amp;S, which has over 600 stores in the UK and 285 abroad, said that consumer confidence appeared to be stabilising, but it remained cautious about the future.<br /><br />&ldquo;We all know that there&rsquo;s more taxation coming in next year. We all know that unemployment will still go up, but maybe by less. We all know that VAT is going up,&rdquo; said M&amp;S chairman Sir Stuart Rose.<br /><br />&ldquo;I think people are less un-confident, but they&rsquo;re certainly not saying we&rsquo;re through this, and we&rsquo;re not through this&rdquo;.<br /><br />M&amp;S admitted that it was slow to respond to the downturn, particularly in its upmarket food business, but has since made changes, introducing new products, price cuts and promotions.<br /><br />Total sales, including those for new or expanded stores, were up 1.7 per cent in the UK &ndash; with growth of 1.2 per cent in general merchandising and two per cent in food &ndash; and 2.9 per cent for the whole group.<br /><br />The firm&rsquo;s international sales were up 15.9 per cent and sales over the internet grew by 28 per cent.<br /><br />Rose said the board&rsquo;s position on succession -- that it will appoint a new chief executive next year and that Rose will step down as chairman by 31 July 2011 -- had not changed.