Brexit vote jitters hit M&S sales
Retail giant Marks & Spencer has revealed an 8.9% plunge in sales at its clothing arm amid pre-Brexit vote jitters on the high street and a cutback on promotions.
The first quarter sales drop was far worse than expected, but M&S blamed a “weak market” as consumer confidence was hit ahead of the EU referendum, as well as moves to cut promotions and shift its summer sale into July.
It added that the timing of Easter knocked around 0.8% off clothing and home sales growth.
The group’s food arm fared better, with like-for-like sales down by 0.9% in the 13 weeks to July 2, of which 0.5% was due to Easter timing, while total comparable store sales were 4.3% lower overall.
Chief executive Steve Rowe said: “Consumer confidence weakened in the run-up to the EU referendum. While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones.”
The clothing and home sales drop is the worst for more than a decade, marking the biggest drop since the March to July quarter in 2005.
Mr Rowe - who took on the top job from Marc Bolland in April - said they were “not the numbers I want to see”, but added they were “the numbers I expected to see” after the group axed 28 promotions under a plan to instead lower every day prices.
The shift in promotions reduced like-for-like clothing and home sales by 5%, according to M&S.
Mr Rowe said consumer confidence was “weaker-than-expected” and remains “fragile” after the Brexit decision.
“We are operating in uncertain times,” he added.
Mr Rowe warned when unveiling his overhaul strategy in May that there would be no quick fix in the battle to revive its beleaguered general merchandise business.
He pledged to cut every day prices for nearly a third of its clothing ranges, while boosting staff numbers on the shop floor.
At the heart of his revamp is a plan to win back ‘’Mrs M&S’’ - its once loyal army of women shoppers aged 50 and over, who he said have been ‘’neglected’’ in recent years.
The plans received a lukewarm response on the stock market.
But he insisted on unveiling first quarter figures the group was “doing the right thing”.
“We knew our actions would reduce total sales but we are seeing some encouraging early signs,” he said.