S & SPENCER yesterday revealed a fall in first half profits after it chose not to pass on the full extent of spiralling costs to cash-strapped shoppers and battled with a “challenging” economic environment.
Britain’s biggest clothing retailer reported underlying pre-tax profits of £315.2m in the six months to 1 October, 10 per cent lower than the same period last year as cash-strapped shoppers spent less on clothes and homewares.
M&S’s food division held its own during the six months, with like-for-like sales rising 2.1 per cent in the first half of the year compared with a 1.3 per cent fall at its general merchandise arm, which includes fashion.
Chief executive Marc Bolland said the retailer had taken “decisive action” by offering promotions and better value to shoppers despite higher commodities costs, as it fights to remain competitive in an increasingly promotional environment.
Bolland, who took over the reins last year, said the group remained “cautious about the outlook” but said the firm was “well set up for the all important Christmas period,” expecting families to splash out and “protect Christmas” while choosing to stay in for New Year.
Despite the fall in profits, M&S’s results were in line with expectations, and its shares rose 4.1 per cent in early trading before closing down 0.77 per cent at 323.50p.