Marks and Spencer chief executive Stuart Rose warned retailers to steady their nerve in the run up to Christmas as he predicted a tough year ahead.
Speaking at the Drapers Summit on Wednesday, Rose told delegates that Christmas was likely to be “quick and rushed” but added that, “customers will come.”
Rose promised that M&S would not go on Sale until December 27th. He added “We’ve had the most peculiar weather this year but if you panic and start discounting you’ll upset the balance of the trading pattern.”
He said that next year shoppers would be worried about the security of banks and the equity value of their houses. However he said M&S was well positioned to cope in tough times.
“In my experience when times get tough people migrate towards quality and value for money. Our customers are a little older and more financially secure,” he said.
He advised retailers to keep costs down and to focus on quality products.
He added that M&S was pressing ahead with international expansion, which would be the chain’s main focus next year. He said “It will be difficult to get a lot more organic growth in the UK in the long term and we plan to have 20% of sales form overseas in the next five years.”
Around 7% of M&S sales are though to come from overseas at present.
Rose said that India and China were potential new markets for the retailer and added that the company was planning a joint venture in India and a company-owned retail operation in China. He said of the Indian market: “India understands M&S and retailing and there is a lot of potential for us there.”
He said although there was no planned launch into the US market, the development of the online business, which is targeted to generate £500 million annually by 2010, would enable the retail to sell to the lucrative US market.
Rose reaffirmed his commitment to the Plan A ethical initiative and is pressing ahead with plans to spend £200 million over five years on being green.