The gloom on the high street was compounded yesterday when Marks & Spencer, the country's leading retailer, reported a downbeat set of profit figures and called for measures to boost consumer spending in the Budget.
Marks & Spencer's pre-tax profits increased by just 9 per cent to pounds 385m in the six months to September, lower than some analysts had expected. Keith Oates, the deputy chairman, blamed the warm summer weather followed by another mild autumn for poorer-than-expected clothing sales. The performance in the food halls and in home furnishings was stronger but not enough to beat City forecasts.
Mr Oates said: "One would have liked to have done better but we are pleased given the circumstances. We are hoping for some sort of stimulus in the Budget. Lower interest rates would be nice or some sort of relaxation in taxes." He added that he was confident the group would enjoy a good Christmas and was stocking more hampers and gift ranges.
John Richards, stores analyst at NatWest Securities, said: "It is a disappointing performance. M&S is supposed to be able to buck these trends and it hasn't."
But Tony Shiret of BZW was more impressed. "It's a pretty commendable result. Marks & Spencer is still a strong brand that can be successfully applied to other areas such as financial services and home shopping."
Group sales increased by 5.7 per cent to pounds 3.2bn in the six months to September. Financial activities, including the M&S chargecard, increased profit by 45 per cent though pensions sales were slower than hoped.
Clothing sales increased by just 2.7 per cent, though food sales rose by almost 6 per cent.
The Brooks Brothers business in America continues to disappoint, recording a pounds 2.5m loss owing to mark-downs on excess stock. Losses in the Canadian operations also deepened due to competition and the difficult economic climate. The stores in Thailand and Singapore performed better. The half- year dividend was increased by 7 per cent to 3.0p. The shares closed 4p higher at 411p.Reuse content