M&S Christmas food sales soar but clothing suffers from cyber-attack fallout | Marks & Spencer
Marks & Spencer said food sales were strong during the key Christmas trading period but clothing sales fell as it continues to struggle with the effects of last year’s crippling cyber attack.
Stuart Machin, chief executive of the high street stalwart, said the clothing, homewares and beauty sector had also been hit by “fragile consumer confidence and mild weather conditions”.
In November, M&S revealed underlying profits had more than halved to £184.1 million in the six months to September 27, from £413.1 million the previous year, after it was forced to halt online orders for more than six weeks due to a cyber breach.
Machin said weak sales in Christmas fashion were linked to a “long tail effect on stock data and management following the event” and “reduced traffic to high streets”.
The figures raise fears that fashion retailers are facing a tough autumn and winter as household budgets are squeezed by mild weather and high energy and food bills.
M&S is also thought to have lost out to rival Next, which recorded huge sales at Christmas thanks in part to its excellent online service.
Machin said the business would “accelerate its remodeling strategy” by closing and moving stores containing clothing and opening up more space for food “against the context of an uncertain consumer environment.”
M&S currently has around 230 full-line stores featuring clothing and food, and almost 800 food-only stores.
The retailer said sales at established stores rose 5.6% in the three months to December 27, while clothing sales fell 2.9%. Total sales rose 3.3% to £4.15 billion, excluding the addition of the Ocado joint venture, which M&S has begun reporting on.
Machin said M&S’s non-food business was “back on track as we head towards the tail end of the recovery”.
He said the food business gained market share with sales growth fueled by strong sales of core groceries with new products and improvements in products such as Italian prepared meals, in-store bakeries and delis, which brought in more customers.
Online grocery specialist Ocado’s sales increased by 13.7%, as the number of items ordered increased by 10.7% and the number of orders increased by 11%.
