UK retailer Marks and Spencer has suffered a 6.1% drop in domestic like-for-like sales as consumers reined in spending on clothes and its premium food.
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For the 13 weeks to 27 September, the group posted a 6.4% drop in like-for-like general merchandise sales, which includes clothes and home furnishings, and 5.9% decline in food sales.
The figures showed that sales fell faster during the company’s second quarter. In the first quarter to 28 June, M&S saw like-for-like sales fall 5.3%, with food sales down 4.5%.
Overall in the second quarter, UK sales fell 1.6%, with general merchandise down 2.9%, clothing down 3.5%, food down 0.5% and home up 2.9%.
Executive chairman Sir Stuart Rose warned: “Consumer confidence remains fragile and the retail environment unpredictable. Consumers are increasingly cautious about their budgets.
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By GlobalData“We have responded by offering our customers better values and more promotions across the business, while at the same time tightly controlling our costs.”
Despite the drop in sales, Rose remained positive about the company’s “quality” food offering, and said the group is “committed” to giving customers “outstanding product while implementing a range of initiatives to improve value, innovation and availability”.
The company said it is expecting operating costs to increase by between 4% and 5% compared to previous guidance of 7%. Capital expenditure will be about GBP700m (US$1.2bn) rather than the GBP800m-GBP900m it had previously forecast.
In the next fiscal year, that will drop to GBP400m.
