M&S sales fall but Tesco blooms

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The Independent Online

The struggling retailer Marks & Spencer today announced a widely expected fall in sales in the fourth quarter.

The struggling retailer Marks & Spencer today announced a widely expected fall in sales in the fourth quarter.

The group said total like-for-like sales dropped by 4.9 per cent during the period while full year sales were down 5.1 per cent against the previous year.

Chief executive Stuart Rose said the trading environment remained difficult, but the group believed it was making progress tackling the issues it faced.

M&S said in a trading update that total like-for-like clothing and home sales declined by 6.7 per cent on a comparable basis in the 13 weeks to April 2, including the impact of Easter and the mid-season sale, while full-year sales in the sector dropped 7 per cent.

Food sales fell 3 per cent in the period and by 2.8 per cent in the full year.

On a financial accounting basis, given that the 2003/4 financial year was for a 53-week trading period, total like-for-like clothing and home sales in the fourth quarter were down 9.2 per cent while food fell 3.1 per cent.

The group said it now expected that pre-tax profits before exceptional items for the 2005 financial year would be in the range of £610 million to £625 million, in line with analysts' expectations.

M&S guided the market towards lower profits of between £600 million and £625 million when it announced trading figures in January, including markdowns for its Easter sale, in a £40 million provision for the second half of its financial year.

It has been hit by weak trading conditions and heavy price-cutting aimed at clearing surplus stock.

The company's fortunes have shown little sign of an upturn despite changes to its top management team and other measures.

Mr Rose said the trading environment remained difficult, but that the company was continuing to focus on delivering "better quality, value and styling" to its customers.

Meanwhile the supermarket giant Tesco set a new milestone for UK business today when it became the country's first retailer to post annual profits of more than £2 billion.

Underlying pre-tax profits rose 20.5 per cent to £2.03 billion, a gain of 20.5 per cent on last year.

Sales worldwide were £37.1 billion - up 12.4 per cent - while £29.5 billion was rung up at the tills of the Hertfordshire-based group's UK supermarkets.

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