Festive sales fall for Marks and Spencer

Tesco and M&S weather the perils of Christmas

Marks & Spencer saw shares slump after it revealed another steep fall in clothes sales and disappointing festive trading in its food halls as it failed to lure in cost-conscious shoppers.

The group, which re-set its strategy in November two months after Archie Norman joined as chairman, said clothing and homeware like-for-like sales fell 2.8 percent in the 13 weeks to December 30, its fiscal third quarter.

"We delivered an excellent operational performance across the group, with great availability, strong customer satisfaction scores and our lowest level of waste ever at Christmas", said Mike Coupe, CEO of Sainsbury's.

Britain's biggest retailer posted its total like-for-like sales growth was 1.9 per cent with food rising 3.4 per cent. Tesco's fresh food sales outperformed its rivals by nearly four per cent, the supermarket added.

Like-for-like (LFL) sales were up 2.3% for the 19 weeks ending January 6 this year across the United Kingdom and the Republic of Ireland.

Shares tumbled almost 7% amid wider falls in the retail sector after sales growth at supermarket giant Tesco missed City expectations.

Steve Rowe, chief executive of M&S, added: "In our food business, ongoing trading pressures continued in the lead-up to Christmas as consumer spending and choices reflected tighter budgets".

M&S slashed prices on 200 lines before Christmas, but Mr Rowe said the group had not been competitive enough on everyday lines.

House of Fraser said Black Friday was more successful for the chain, with sales over the promotional event in November up 0.8% in stores and within 1% of last year's record performance online.

Taking the 19 week period as a whole, LFL sales in Central Europe, rose 0.6%, and fell 11.1% in Asia. The engineering firm said that changes in USA taxes will result in a one-off non-cash tax credit for 2017.

The timing of these companies' announcements couldn't come at a more telling time, coming against the backdrop of a stellar period for German discounters, as per Kantar data earlier in the week, and outstanding performances from fashion retailers.

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