Marks & Spencer chief executive Steve Rowe said the retailer was “holding its nerve” in its stance to reduce discounting in a highly promotional market.
Like-for-like clothing and homewares sales at M&S fell by 8.9% year on year in the first quarter of 2016 after it pushed its summer Sale back by two weeks and reduced its promotional activity.
The business had nine clearance Sales last year, this year it will drop to six and in 2017 the retailer intends to only have four.
Rowe said the business had moved away from blanket discounting and will only run fewer, targeted promotions.
“We started pulling back on rash promotions since September and that has made a big difference. We took out 28 promotions in the first quarter compared with last year. Last year 41% of sales were on promoted stock [in clothing]. We want to take that down significantly.”
He added: “In the first quarter last year we had three cyber days with 20% off everything. It’s important to get away from that, as it was damaging customer’s perception of the brand as there were different prices online and in store. We are doing fewer promotions, and they will be more targeted. The days of 20% blanket deals are over. That’s not the game we’re going to play any more – we’re going to trade the business properly.”
Rowe said he was “pleased” with the reaction to reduced pricing in certain lines across women’s and men’s wear during the three months. In women’s leggings prices were dropped from £19.50 to £15 and volumes were up 149% year on year.
“The early signs in clothing have been encouraging,” said Rowe. “There has been greater volumes in those of those dropped price items and we will continue to drive this in autumn. We are heading in a more positive direction in terms of market position.”
The chief executive said the retailer will see further “substantial” changes to pricing and discounting in autumn but said it was “too early” to predict when clothing sales would return to positive figures.
“It’s not where we want it to be but it’s what we expect,” said Rowe. “Our prices were too high, we were too promotional and we had eroded our position. We must break the cycle. We are taking action in a difficult market and holding our nerve.”