Marks & Spencer has said that trading conditions will remain “very challenging” after reporting a slowdown in UK sales growth, as predicted.
M&S said UK like-for-like sales - which outstrip the impact of new stores - rose two per cent in the 13 weeks to June 30; the lowest increase for nearly two years. The retailer said rising interest rates and “extreme weather” had combined to make trading volatile in the quarter.
The wettest June on record has dampened sales of summer clothes and food, and analysts have been predicting a demanding time for all high street retailers following the five interest rate rises in the past year.
M&S reported a 28.5 per cent increase in annual profit to £965.2 million last year, but it has not been able to avoid the tougher trading environment.
“Rising interest rates, general uncertainty over consumer spending, and extreme weather conditions combined to make market conditions particularly volatile over the quarter,” M&S chief executive Stuart Rose said. “We believe that the short term trading environment will remain very challenging, but our plans are unchanged.”
M&S said its international sales had “performed well” over the period, with sales rising by 14.8 per cent.
M&S said overseas like-for-like sales at its general merchandise division were up 2.9 per cent during the period, while like-for-like food sales rose by just 0.7 per cent. It opened 10 stores during the period, including its first stores in Lithuania, Taiwan and Ukraine.
The retailer added that its store modernisation record was on track for it to have 70 per cent of its outlets revamped for the crucial Christmas trading period.
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