M&S logs sliding sales despite strong performance in food

Marks and Spencer suffered a slump in overall trade ahead of Christmas as virus restrictions slashed visits to UK stores, offsetting solid sales of food online, it said Friday.

Total sales sank 8.4 percent to £2.8 billion in its third quarter to December 26, compared with the same period a year earlier, M&S said in a statement.

The company, which last year axed 7,000 jobs due to the virus fallout, said clothing and household goods tumbled by a quarter in the pre-Christmas trading period.

Sales of food however rose 2.2 percent, helped by the performance of its popular Christmas product ranges.

Food also enjoyed strong sales as a result of a tie-up with online supermarket Ocado, which has experienced booming demand during the pandemic.

“Given the on-off restrictions and distortions in demand patterns our trading was robust over the Christmas period,” said chief executive Steve Rowe.

“More importantly beneath the Covid clouds we saw a very strong performance from the food business, including Ocado Retail, and a further acceleration of clothing and home online.”

He cautioned that the outlook remains “very challenging” after Britain toughened its Covid-19 restrictions this week in response to surging infections, with England and Scotland going back into a weeks-long lockdown.

Added to the gloom, Rowe warned that new rules arising from Britain’s Brexit trade deal with the European Union would “significantly impact” business in the Czech Republic, Ireland and France.

“The free trade agreement with the EU means we will not incur tariffs on our core UK sales,” Rowe said.

“However potential tariffs on part of our range exported to the EU, together with very complex administrative processes, will significantly impact our businesses in Ireland, the Czech Republic and our franchise business in France which we are actively working to mitigate.”