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Summary of Sir Stuart Rose's press call on Christmas Trading

Drapers summarises the content of M&S chief executive Stuart Rose's conference call with national and trade press on January 9 following the release of the retailer's Christmas trading statement.

Group sales were up 2.8% for the 13 weeks to December 29 with general merchandise up 0.7% and food sale ahead 5.1%. However UK like-for-like sales were 2.2% down with general merchandise down 3.2% and food down 1.5%. International sales were up 15.1%.

Sir Stuart Rose began the conference call by outlining his view of the market over the trading period.

"The first thing is that the market has seriously softened particularly in November and December. It is fair to say that we are in for a tough time for UK Plc economy. We are preparing for a tough time until spring 2009. We are not immune from that market because we are the largest retailer of clothing in the sector by volume and by value and we have the largest geographic spread. So that is a confirmation that people are cutting back a little bit."

M&S plan to keep investing in business
"If you look at M&S you need to spend some time understanding the numbers we put out this morning. We sold more goods to more people than we sold last year. And we sold more goods on a like-for-like basis than we sold last year despite the fact that the l-f-l number is down. That is because we had some 6% price deflation. In fact we saw our biggest volume increase in sales over this period for six years."

"M&S customers had a great Christmas while M&S in revenue terms had a flat Christmas, although I will say that was against very strong comparisons over the last couple of years."

"We traded full price up until Christmas. We cleared our stock and we have now come out of Sale into a full price spring. We continue our plan to invest in the business in terms of products, stores and environments."

"You have to remember that our price management has to be for those people who are financially challenged through to those who have got rather more to spend. That is the portfolio of customers we have to look after. The market is tough. We have to keep our heads down and keep our nerve and keep trading forward. We are not immune from wider economic circumstances."

Question 1: Elizabeth Rigby of The Financial Times: Could the trading statement be termed a profit warning as analyst notes suggest it was?

Rose: "It's not a profit warning. We have only just finished the third quarter and we have still got 12 weeks to run in terms of trading. The analysts will have to do what they do. We have not commented on profits."

Question 2: - Will you be cutting your capital expenditure? reviewing your store refurbishment programme ?

Ian Dyson [M&S finance director] said: "We spent £1.5 billion doing 70% of our stores. Returns are strong with modernised stores generating incremental returns over and above non-modernised. We are committed with continuing that programme over time. We will look at the pace of the refurbishment programme on the remaining 30% of the estate. It's only right that we review our capital expenditure in the light of the economic environment"

Question 3: Steve Hawkes, The Times: What is going to happen to staff bonuses given the pressures the business is now facing? Will you leave in 2009? You have been seen as a saviour of the business up to now but I was wondering today, how you feel personally?

Rose: "Personally I'm as fit as a flea. Look, life is all about ups and downs. There is no crisis here. All you are seeing is that the largest retailer of clothing in the UK is saying that yes UK customers are being more circumspect about what they are spending going forward. We anticipated that and reduced the price of our goods by some 6% so when we took £100 on goods last year we only took £94 this year. So you have to run very hard to stand still. ...Now would you rather go into a difficult climate with a really aggressive first-price-right price-stance? Or would you rather go into it with and have to be 70% off before Christmas? I pose the question to you.

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