Monday, 22 January, 2018

'Mixed' Performance For Marks & Spencer In Q3

Tesco is festive winner reporting record Christmas sales Tesco hails “strong” quarter despite Palmer & Harvey fallout
Nellie Chapman | 12 January, 2018, 03:21

It came as the firm posted a trading update, where it chalked up a "strong" half-year performance thanks to a rise in forward sales and completed homes.

Marks & Spencer noted a fall in revenues in both its food and its clothing and home departments in the 13 weeks to 30 December, the retailer said in a trading statement on Thursday.

Tesco, the UK's biggest supermarket chain, reported like-for-like growth of 1.9% for its United Kingdom stores, a performance it said as thanks to the strength of its food business which saw underlying growth of 3.4%.

Supermarkets Morrisons and Sainsbury's also suffered in the wake of the slump, drifting down 3.3p to 226.2p and 5.3p to 248.6p respectively.

Tesco's sales in Central Europe increased by 0.6 per cent but Asia declined by 11.1 per cent, resulting in a group like-for-like sales growth of 0.6 per cent for the quarter.

General merchandise was also the Achilles heal for Sainsbury's as it reported a 1.1% rise in like-for-like sales over the 15 weeks to January 6. While retail inflation remains a market-wide issue, Tesco's fresh categories significantly outperformed the market, with meat and poultry volume sales particularly strong.

Tesco has reported a "strong" third quarter, with like-for-like sales in the United Kingdom and Ireland up by 2.3 per cent.

According to its latest trading update, third quarter like-for-like sales in the United Kingdom grew by 2.3 per cent - representing Tesco's eighth consecutive quarter of growth - and total sales grew 2.5 per cent. Gains in the FTSE 100, however, remain capped, with retailers weighing on the index following disappointing results by Tesco (LON:TSCO) and Marks & Spencer (LON:MKS).

Despite the sales disappointment M&S said it would maintain its financial guidance for the full 2017-18 year.

The retailers blamed tough trading conditions, with Tesco speaking of "inflationary pressures" and M&S referring to "ongoing trading pressures".

Catherine Shuttleworth, chief executive at retail marketing agency Savvy, said: "We think that the M&S food shopper has in part been lured away to the discounters this Christmas with their enhanced premium ranges and outstanding wines and spirits offers".