Marks & Spencer yesterday posted its first fall in full-year profits for three years, as the squeeze on consumer spending took its toll on the retail giant.
The company's chief executive, Marc Bolland, came under further pressure as he added that the almost incessant downpours in April led to a "tough" start to this financial year.
Alongside the first drop in profits at the high-street stalwart since 2009, the 128-year-old retailer was forced to downgrade its target to grow sales by up to £2.5bn by 2014 because of a deterioration in the UK economy.
Further disappointment for its army of private shareholders came when it announced a flat dividend.
Mr Bolland, who took the helm in May 2010, said M&S and other retailers had found the almost unending rainfall over the past six weeks hit footfall.
The British Retail Consortium has blamed the weather for a 12.6 per cent fall in the numbers of high street shoppers for April.
M&S, which has more than 730 stores in Britain and 387 overseas, posted a 1 per cent drop in underlying pre-tax profits, to £705.9m for the year to 31 March.Group sales rose by 2 per cent to £9.9bn. The dip in profits means M&S's 78,000 employees will get a smaller bonus this year.
Mr Bolland said it had "performed well in a challenging economic environment" but underlying UK sales at the retailer rose by just 0.3 per cent.
While its food business grew, general merchandise business, which is dominated by clothing, suffered a 1.8 per cent slip in UK like-for-like sales.
Its non-food margins tumbled by 0.8 per cent, as it was forced to slash prices to combat fierce discounting by rivals.
Neil Saunders, managing director at Conlumino, said of M&S's womenswear that "in-store ranging and merchandising is both confusing and, all too often, uninspiring".
M&S's UK food division delivered underlying sales up by 2.1 per cent, boosted by 1900 new lines.
Mr Bolland blamed the weak UK economy for scaling back the retailer's ambition to grow group sales by as much as a quarter to £2.5bn to £12.5bn by March 2014. It now expects growth of between £1.1bn and £1.7bn.
The group plans to add 3 per cent of new space in the UK in the year to March 2013, but, in the wake of strong online growth, will slow its store expansion programme to 2.5 per cent the next year and further thereafter. This means it will invest £200m less on its UK store estate over the two years to 2014.
But M&S will spend an extra £50m ramping up its international expansion, particularly in China and India, over the same period. Mr Bolland said: "By the end of this year we will be transacting from 10 websites worldwide and opening around 100 international stores per year." M&S maintained its full-year dividend at 17p a share.
On UK consumer spending, Mr Bolland said: "Shoppers feel a bit more squeezed than last year because of petrol prices."
Shares in M&S rose 6p to 344.3p yesterday.Reuse content