M&S Food sales drop is ‘concerning’: analyst

The fall in like-for-like sales was worrying, given that M&S could usually rely on food to boost its overall performance, EIU said. The Food division reported sales of £1.407M in the 13 weeks to July 1, M&S reported today (July 11).

Economist Intelligence Unit retail analyst Jon Copestake said: “Of more concern​ [than a drop in like-for-like clothing sales] is the like-for-like fall in food sales being reported, given that food and groceries have represented a bright spot for M&S in recent years.​

‘The good news’​

“The good news is that food sales are continuing to see fairly solid overall growth, thanks to store openings. Nevertheless, there remains much to do for the incoming chairman ​[Archie Norman] when he takes the helm in September.”​

M&S chief executive Steve Rowe said the retailer had delivered “strong growth”​ in its Food business over the 13 weeks, after opening more stores and introducing better offers.

Rowe said: “In our Food business, we delivered strong growth from new Simply Food openings, and are prioritising better ranging and stronger promotions.”​

On-track to meet expectations​

The overall M&S group was on-track to meet its expectations, Rowe said. Group year-on-year sales were up 2.7% to £2.532M (up 1.8% in constant currency).

The fall in Food like-for-like sales came after M&S in May reported a £312.4M drop in profits​ for last year. In the year to April 1, M&S opened 68 Simply Food stores, but like-for-like food sales fell by 0.8%.

Meanwhile, former ITV and Hobbycraft chairman Archie Norman will join M&S as non-executive chairman from September 1, the retailer revealed in May. Norman will succeed Robert Swannell, who will retire from the board.