Marks & Spencer chief executive Sir Stuart Rose has warned the market he expects the challenging trading climate to continue well into spring 09.
He predicted tougher times ahead as he updated the City with a Christmas trading statement, which revealed that like-for like sales at the retailer had fallen 2.2%. General merchandise, which includes clothing sales, was also down 3.2% like-for-like for the 13 weeks to December 29.
Rose said it was the worst trading period he could recall in the past decade and that like-for-like sales had slipped despite Marks & Spencer selling more goods to more people. He said: “The market has seriously softened, particularly in November and December, and we are in for a tough time for the UK plc economy. People need to understand when they look at the figures that we sold much more, but at prices that were 6% lower than at this time last year.”
When asked if menswear sales had outperformed womenswear, as suggested by the British Retail Consortium figures this week, Rose said: “There was very little in it. Womenswear held its market share over Christmas and increased volume sales.”
Rose conceded that M&S was likely to slow its aggressive store refit plan to rein in its capital expenditure. It has already modernised 70% of its portfolio, but Rose said that at least 10% of remaining stores would be refitted by the end of the year, regardless of any cutbacks.
He said M&S was well placed to ride out the downturn. “Where would you rather be in a difficult climate?” he said. “At a ‘first-price-right-price’ retailer like us, or at a retailer that has to discount by 70% three weeks before Christmas?”
Separately, Rose conceded there was a chance that staff bonus targets would not be reached.
To read Rose’s full press call click here.