London, UK (BBN)– Marks and Spencer (M&S) has said like-for-like sales at its clothing arm fell by 8.9 per cent in the first quarter (Q1), as a “weak market” and fewer promotions hit sales.
Meanwhile, like-for-like food sales in the quarter were down by 0.9 per cent, reports BBC.
In May the firm’s new boss Steve Rowe unveiled plans to revive the retailer’s clothing and homeware business, with lower clothing prices and better style.
The firm said consumer confidence weakened in the run up to the June 23 European Union referendum in the UK.
But it said it was too early to quantify the implications of Brexit.
In early morning trade, shares in M&S, which have fallen 29% over the last three months, were down by 1.2 per cent to 290.6p.
Pricing policy
M&S also said that this year its summer sale began on 5 July, two weeks later than in 2015, a move that would reduce total sales.
The firm said the impact of moving the summer sale and running fewer promotions than last year accounted for 5% of the like-for-like sales fall.
“We continued to reduce the number of promotional events during the quarter, including just one ‘cyber day’ compared with six last year,” the firm said, adding that it had repriced some 1,000 clothing lines since January.
Those 1,000 clothing lines have seen price cuts of around 17% since January, with some seven million items affected.
Chief executive Steve Rowe said the food business “continues to strongly outperform a deflationary market”, with the 0.9 per cent fall in like-for-like sales reflecting the timing of Easter.
He said the firm was “confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business”.
‘Uncertain times’
Mr Rowe also said that consumer confidence started to weaken in November, which continued through May and in the run-up to the EU referendum:
“We are operating in uncertain times and consumer confidence remains fragile,” he added.
Today’s first-quarter figures from M&S are worse than analysts’ forecast a 5.0 per cent to 8.0 per cent drop for clothing sales.
M&S said its full-year guidance remains unchanged: “We continue to manage the business for the challenging market environment.”
Richard Lim, chief executive of research consultancy Retail Economics, said: “M&S’s clothing figures are painfully weak, and fail to stem the loss of market share to other, more-agile, multichannel competitors.
“Its tireless efforts to revive the struggling clothing business have failed to resonate with its core customer base.”