M&S margins in squeeze

MARKS & SPENCER gives a first quarter trading update this week, with analysts predicting pressure on margins after the retailer launched its earliest ever summer sale.

Chief executive Marc Bolland is overhauling the retailer with a plan aimed at improving web sales and bringing in hundreds of new food lines.

Keith Bowman at Hargreaves Lansdown said: “Investor nerves were recently heightened as the company launched its summer sale earlier than last year. The move, whilst potentially aiding sales could harm the profit margin. Prior to the update, market consensus opinion currently denotes a strong hold.”

Luxury products maker Burberry is also due to update the market this week and has seen its share price boosted despite the broader retail gloom. Meanwhile Primark owner Associated British Foods will update the market on Thursday.

The group’s April half year results, saw profit progress but management comments over raw material costs cast a shadow.