Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

M&S cuts costs as like-for-like sales fall 6.1%

UK like-for-like sales at Marks & Spencer dropped 6.1% for the 13 weeks to September 27, and the retailer has cut back spending.

General merchandise like-for-likes in the UK were down 6.4%.Total group sales were up 0.4% for the period, with total UK sales down 1.6%. Within that, fashion sales dropped 3.5%.

International sales were up 24.2% but UK sales fell 1.6% with general merchandise down 2.9%. Online sales rose 34%

Chairman Sir Stuart Rose said that he expected UK gross margin to fall 100 basis points, following a more promotional stance at the business. He added that the business was cutting costs and would decrease capital expenditure this year.

Rose said Marks & Spencer expected operating cost growth for the year of 4-5% compared to previous guidance to 7%. Capital expenditure would be around £700m compared to previous guidance of £800-£900m.

For 2009/2010 he expected to spend around £400m with the focus of spend being on supply chain and information technology systems.

Rose said that UK sales remained relatively steady quarter on quarter, despite the difficult environment.

He said: "Consumer confidence remains fragile and the retail environment unpredictable. Consumers are increasingly cautious about their budgets. We have responded by offering our customers better values and more promotions across the business, while at the same time tightly controlling our costs."

"Our investment to improve values along with a more promotional stance has more than offset improvements in bought-in margins. As a result we are currently expecting a reduction of around 100 basis points in the UK gross margin for the full year, although this will depend on market conditions and our trading stance."

The company will report interim results on November 4 2008.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.