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Marks & Spencer sales return to growth, both online and offline

M&S says strategy on track as it reports rising online and offline sales

M&S says strategy on track as it reports rising online and offline sales

Marks & Spencer has reported a return to growth in sales, both online and off. A double digit upturn in ecommerce sales came almost a year after the food-to-clothing retailer launched its new ecommerce platform, a factor that hit its digital sales for three sucessive quarters.

M&S said ecommerce sales had grown by 13.8% in the 13 week fourth and final quarter of its financial year, to March 28, compared to the same time last year. That contrasts with performance in the first three quarters: first and second quarter sales were down by 8.1% and 4.6% respectively, while third quarter sales fell by 5.9%. The new M& ecommerce platform launched last February.

Third-quarter ecommerce sales had appeared to turn a corner in October and November before disruption at its new Castle Donington distribution centre hit dotcom sales and deliveries over Christmas. Speaking to Internet Retailing for the IRUK 500 Brand & Engagement report, which judged M&S the leading retailer in the dimension, David Walmsley, director of M&, said, earlier this year: “I think everyone who has moved from one platform to another has experienced a period of transition. We went through massive amounts of change.” But, he added, “What our customers are telling us is that they’re increasingly enjoying shopping on the website and are happy with the experience.”

Today the company said in its fourth-quarter trading statement that website metrics including traffic, conversion and customer satisfaction had continued to improve over the period, while its Castle Donington centre had performed well during the quarter.

The update came as M&S reported a 1.9% rise in fourth-quarter group sales. That included 0.7% like-for-like rise in UK sales, where food and general merchandise sales grew by the same 0.7%. Food sales bucked a deflationary trend thanks, said the company, to factors including a record Valentine’s Day and the launch of more than 350 new products. International sales fell back by 3.8%.

Marc Bolland, chief executive, said: “We have made strong progress over the quarter. In food we delivered another excellent performance, with sales growth ahead of the market. We continued to deliver on general merchandise gross margin, and are pleased that we have achieved this whilst also improving general merchandise sales. M& has returned to growth, as planned, with further improvement in customer metrics.”

Sounding a note of caution, analyst Bryan Roberts, director of retail insights at Kantar Retail, said: “While the general merchandise numbers might be the cause for muted celebration, the overall verdict is that the stars have aligned for a single quarter and we await consistent repetition of this feat before we can proclaim a recovery.”

Ken Odeluga, enior market analyst at CityIndex said: “Marks & Spencer said in its fourth-quarter statement on Thursday that it had finally broken an uninterrupted run of like-for-like sales declines in its non-food business.

“The outcome is M&S’s best performance in that segment for nearly four years. It looks like a material part of the recovery can be put down to the recent completion of M&S’s protracted efforts to fix online distribution problems. The market is undoubtedly applauding the demonstrable turnaround of the online business.”

To download the IRUK500 Brand & Engagement report click here.

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