M&S Christmas sales boosted by food and discounting
Marks & Spencer has recorded a slight fourth quarter sales increase on the back of growing food sales and heavy discounting.
Marks & Spencer: Frankie Cocozza stars in the Christmas campaign
The retailer, often cited as the bellwether of the high-street, grew like-for-like sales by 0.5% during the 13 weeks to 31 December 2011.
A healthy jump in food sales of 3% was offset by a 1.8% decline in general merchandise sales, which M&S attributes to pulling out of the technology sector.
The retailer, which is famed for its Christmas ads, partnered with 'The X Factor' for its latest campaign, which stirred controversy when finalist Frankie Cocozza was edited out after a drugs scandal.
M&S also launched a number of discounting promotions during the period, particularly on its menswear range, which will have impacted on profit margins.
Total clothing sales increased 1.1%, partly as a result of M&S reporting its best ever quarter in kidswear.
Total home sales were down 13.3% following the retailer's withdrawal from technology, but M&S will look to turn this around with a number of new ranges, including its Conran Exclusive Design tie-up with designer Sir Terence Conran.
The Conran Exclusive Design range currently comprises a 70-line preview collection available in 24 stores and online. It will be extended to over 300 lines in 2012 and made available in a further 16 stores.
Marks & Spencer is also hoping a revamp of its store layout later this year will lure customers back through its doors.
Online sales received a massive boost during the quarter, increasing by 22.4% and matching the online success of rivals John Lewis and Next, which reported last week.
The increase was driven by an extension of the next-day delivery deadline and the launch of a Christmas Food to Order service, which contributed to a 12% increase in orders.
Marc Bolland, chief executive at M&S, said: "Our food business performed very strongly as customers enjoyed our new and traditional Christmas products. This unique offer, coupled with our great deals, gave them more choice than ever before for a special Christmas at home.
"In clothing our focus was on offering our customers real value at a time when they're managing their budgets carefully. Our trading strategy worked well, delivering a record performance in many categories including menswear and sleepwear."
Bolland has also hinted the retailer is prepared to continue its policy of heavy discounting by saying M&S has a flexible customer offer, depending on customers' budgets and spend.
Also updating the market today was department store chain Debenhams, which operates 170 stores in the UK, Ireland and Denmark and 66 franchise stores in 25 countries.
Like-for-like sales excluding VAT for the 18 weeks to 7 January were flat, but within that figure like-for-like online sales grew 34.8%.
The company disclosed that December trading produced a 6.5% rise in sales including VAT, but did not give any guidance on profits other than that gross margin guidance for the financial year remained flat.
Michael Sharp, chief executive of Debenhams, said: "We are confident that the design, quality and value offered by our spring/summer 2012 product ranges will find favour with customers and expect to see some benefit from lower input prices in the second half of the year."
Follow Matthew Chapman @mattchapmanUK
This article was first published on marketingmagazine.co.uk
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