M&S records biggest ever day in food sales
High street giant Marks & Spencer said today that it had overcome the severe weather over Christmas after recording its biggest ever day in food sales.
The retailer said big-impact promotions helped food sales achieve a record of more than £50 million on December 23, while UK like-for-like sales in the 13 weeks to January 1 grew at a better-than-expected 2.8%.
The results come amid a mixed run for UK retailers - after HMV, Next and Debenhams all posted a slump in sales over the Christmas period.
The household name enjoyed a good run in 2010, with like-for-like sales consistently beating expectations and profits in the first half of the financial year up 17% at £348.6 million.
Today's figures reflect chief executive Marc Bolland's first Christmas with the company, and the first trading update since he unveiled his three-year plan.
M&S said UK food sales grew 1.8% in the third quarter, while general merchandise, which includes clothing, rose by 3.8%.
The retailer increased its market share in food to 3.9%, according to researcher Kantar, as the firm launched more than 600 new products during the quarter.
M&S Food was also promoted in a series of new ads over the festive season starring actress Caroline Quentin, who is seen hosting a Christmas party.
Mr Bolland said: "Marks & Spencer traded well through the important Christmas period despite the severe weather as customers continued to return to M&S quality.
"We delivered a great Christmas for our customers, from our stylish occasionwear to our innovative festive food."
M&S said it was pleased with its performance but pointed out that the five sale days after Christmas included in today's figures were not included in the third quarter period last year.
In food, deals-of-the-week promotions and half-price champagne were popular, M&S said. The company sold a record 1.9 million turkeys in the period, up 10% on last year, while salmon and prawns were up 17%.
The company does expect food price inflation of around 1% to 2% in the final quarter of the financial year, but said it was focused on offering competitive pricing to its customers.
M&S said that, in clothing, customers bought up seasonal items such as Fair Isle knitwear, and sleepwear, thermals and tights sold well.
Mr Bolland said the company was witnessing a "return to quality", with customers willing to pay more for their better quality clothing. The company sold 600,000 cashmere products worth £69 or more in the period - up 10% on last year.
"There's been an increase in the number of customers returning to high-quality products," Mr Bolland said.
"We're offering a wide range of styles in the store and customers are also responding well to that."
M&S Direct - the company's website - reported a 25% increase in sales in the quarter, while international sales were up 4.5%.
The company estimates the adverse weather conditions had a 1% impact on food sales and 3% on general merchandise, though it was unable to provide a cash figure.
But broker Singer Capital Markets estimates the cash impact from snow to be £45 million - £10 million to food and £35 million to general merchandise.
Looking ahead, M&S said it expects trading conditions to be hit by the VAT rise and the impact of public spending cuts.
The company added it is facing increased commodity prices - in clothing and food - but its existing guidance for full-year performance remains unchanged.
Mr Bolland's strategic plan, revealed in November, involves a drive to place the chain's own brand at the forefront of the vision for the business.
In clothing, as well as boosting its own brand, the company plans to invest in its sub-brands - such as womenswear ranges Per Una and Indigo Collection - through improved marketing and clearer positioning in stores.
Mr Bolland also plans to strip back the non-M&S food lines on offer, but the company will increase the total food range from 7,000 to 8,000 lines.
The former Morrisons boss also said £150 million will be invested into the group's online business.
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