As Marks & Spencer announces third-quarter general merchandise sales fell by 5.8% after warm weather in October and November and disruption at its Castle Donington distribution centre stunted pre-Christmas sales, Drapers rounds up analysts’ reactions.
Independent retail analyst Nick Bubb: “The near 6% fall in M&S general merchandise like-for-like sales in the Christmas quarter is fairly disastrous, not helped by the online weakness and warehouse problems, but the damage to the M&S gross margin is not as bad as feared - because they were discounting a bit less than the year before - and cost-cutting has saved M&S from a profit warning. Plenty there for management to be defensive about as the long-term decline of M&S continues.”
Neil Saunders, managing director of Conlumino: “Back in November, M&S’s numbers were showing some signs of improvement. Unfortunately, this dismal set of figures indicates this momentum has not been carried through into the Christmas quarter. The rejuvenation of M&S’s clothing offer is at a relatively early stage and it has not yet completely won back the confidence of consumers. This means performance can easily be blown off course by negative headwinds; and the gusts certainly blew this Christmas.”
Phil Dorrell, director of the retail consultancy Retail Remedy: “The improved margin on clothes is a sound long-term aim, but Marks remains a volume retailer and not a boutique. It simply cannot allow sales to fall at the current rate. A 5.3% like-for-like fall in clothing sales is woeful compared to the success of its high street rivals, and unforgivable given the length of time it has been working on a turnaround strategy.”
Director of retail consultants Retail Vision John Ibbotson: “Once Britain’s greatest retailer, M&S’s general merchandise division is starved of all inspiration. However buoyant its food sales are, the dead weight of clothing is dragging M&S down to the bottom. The quality, price and website of its clothing arm are simply not good enough compared to the ever buoyant Next. M&S is still also confused about its target market — young or old? The middle class, as incongruous as it seems, is falling out of love with M&S.”