Marks and Spencer is expected to report an improvement in sales at its general merchandise arm as the retailer recovers from its recent warehousing debacle and thanks to fewer clothes being left on the shelves.
Citi, joint broker to M&S, expects the high street chain to report a 0.1 per cent decline in underlying sales of general merchandise in the fourth quarter, almost bringing 14 consecutive quarters of falling sales to an end.
But that compares with a 5.8 per cent decline in the third quarter, when disruption at M&S’ Castle Donington online distribution warehouse badly affected online sales.
M&S’s food business – which contributes over half of group sales and about a third of profit – is expected to have outperformed many of its food rivals, with Citi analysts predicting like-for-like sales up 0.1 per cent.
Chief executive Marc Bolland has spent billions of pounds addressing decades of under-investment at M&S, overseeing the redesign of products, stores, logistics and its website. In February last year, it broke away from its technology supplier Amazon and launched its own £150m website, which has suffered a series of setbacks.
Meanwhile, its clothing division has so far failed to deliver a sustained increase in sales despite bringing in a new design team in 2012.
“After a disastrous third quarter, with the new distribution centre buckling under strong demand at peak, we look for signs of increased stability,” Peel Hunt analyst John Stevenson said.
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