M&S shows its loyalty to struggling high street

Marc Bolland, the chief executive of Marks & Spencer, has reaffirmed its commitment to the UK high street at a turbulent time for the sector, as the April bank holidays helped it deliver a solid first quarter.

His reassuring comments came as M&S avoided a bloody nose over pay at its annual meeting yesterday, after investors backed the retailer's remuneration policy. In particular, shareholders supported its award of controversial "golden hellos" to Mr Bolland and Laura Wade-Gery, its head of e-commerce, and the £8.1m goodbye payout to its former chairman Sir Stuart Rose for long-term rewards.

But it was Mr Bolland's comments on the beleaguered UK high street that captured the eye.

He said: "We have at the moment 219 stores on the high street and our stores perform well. We are actually a sort of anchor of the high street so we are planning to invest in the stores. We have a strong belief in the high street."

M&S – which has more than 600 stores in the UK – plans to grow its estate by about 2 per cent this year. It will also, from this autumn, segment its products in a number of pilot stores, based on an area's demographics and affluence, for the first time in its 127-year history.

Mr Bolland's support for the high street followed a string of retailers, including Jane Norman and TJ Hughes, collapsing into administration in the past month. Yesterday, M&S said that market share gains in clothing and food had driven a 1.7 per cent rise in UK like-for-like sales for the quarter to 2 July.

However, while M&S may have fared better than some of its clothing rivals by growing market share by 20 basis points to 11.7 per cent over the 12 weeks to 15 May, according to Kantar Worldpanel, the retail giant's underlying clothing and other general merchandise (GM) sales in the UK were flat in its first quarter.

Indeed, this implies its GM volumes were down and sales by value would have been far worse if M&S had not raised its clothing prices by more than 6 per cent, partly to combat soaring cotton costs.

But Mr Bolland boasted its customers had continued to "buy once and buy well". He also highlighted "innovative" products, such as its Brazilian-cut knickers, of which it sold 500,000 pairs over the quarter.

In food, M&S grew UK like-for-like sales by 3.3 per cent, boosted by strong demand for party food ahead of the April bank holidays and royal wedding.

However, it also helped itself by launching more than 500 new products and a continued focus on its popular "Dine In" food promotions.

Total sales at M&S, which has more than 300 overseas stores in over 40 territories, rose by 3.2 per cent in the quarter.

At its AGM yesterday, M&S's shareholders gave a vote of confidence to its remuneration report, with 97 per cent voting in favour of it.

However, there was a bigger protest vote against the retailer's right to allocate shares to directors under its long-term incentive plan, with 16 per cent refusing to support it.