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M&S gains clothing share, but volumes fall

Marks & Spencer has said that sales of general merchandise, which includes clothing, for the first quarter of its financial year were up 0.3%.

Total UK like-for-like sales excluding VAT were up 1.7% while general merchandise like-for-likes remained flat over the first quarter the period to July 2, results which M&S described as a “good performance in a challenging market”. Total group sales excluding VAT were up 3.2%.

M&S said clothing market share was up 20 basis points in the quarter, rising to 11.7% which spells 17 months of consecutive market share growth in the category. It said this was largely due to customers turning to M&S quality for their everyday essentials, including tailoring and underwear.

Chief executive Marc Bolland said that the retailer has seen a continuing trend for consumers to trade up and buy “better and best” products but that quality basic products also remained strong sellers for M&S.

The average selling price increase in the period was 7% and just under a third of this figure was driven by inflation.

Bolland conceded that sales volumes in general merchandise were down in the quarter but did not provide clarity on specific categories.

Separately the retailer defended its decision to go on summer Sale two weeks earlier than the previous year. Bolland said: “We bought our sale forward to follow the market . It does not make sense to go on Sale when everyone else has already been on Sale. It was just a matter of timing.”

He added that he did not expect the decision to go on Sale to affect gross margins at the year-end and existing guidance on margins for the full-year remained unchanged at between flat and 25 basis points up.

Meanwhile direct sales through M&S’ multi-channel business, rose 13% in the quarter with consumers responding well to the Shop Your Way multi-channel service. Bolland also added that mobile sales performed well for the retailer during the period.

On the trading outlook the retailer said it expected trading conditions to remain challenging due to pressure on consumers’ disposable incomes and higher commodity prices.

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