Economy

Marks & Spencer festive food and clothing sales fall

Marks & Spencer festive food and clothing sales fall”

Shares in Tesco fell 4 percent at the open, and were trading down 3.5 percent at 0915 GMT, the second worse performer after Marks & Spencer, which reported a fall in like-for-like Christmas sales on Thursday.

Food sales grew by 3.4 percent, and fresh food specifically by 3.7 percent in the six weeks before Christmas, he said, but weaker sales in general merchandise were a 0.6 percent drag and the disruption in tobacco supplies took a 0.5 percent toll.

"Despite many predictions that Tesco had "won" Christmas, with that accolade instead being shared by Morrisons and the Co-op, the market leader nonetheless enjoyed a very creditable festive period", he said.

M&S said a pick up in trading over the key Christmas weeks helped make up for a weak clothing market and more hard trading in its food business, with consumer spending under pressure amid a squeeze on budgets from inflation.

Looking ahead, Tesco said it is confident in its outlook for full fiscal 2018 and is on track to meet its medium-term restructuring goals.

Tesco said all its formats, covering stores and online, had performed well, resulting in record sales and volumes in the four weeks leading up to Christmas Day.

Shares fell more than 2% after its update.

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Analyst Adam Tomlinson at Liberum said: "A tough October impacted and the business carried more stock into its December sales than planned".

Like-for-like sales for the combined UK & ROI business over the 19-week period grew by 2.2%.

Online sales at M&S.com lifted 3%, while its ongoing move to pull out of global markets saw overseas sales slump 9.8%.

One drawback was general merchandise, of which United Kingdom like-for-like sales fell 0.6% in the period as Tesco continued to de-emphasise some categories.

But, but, but, the clothing department is always a bit rubbish; how about the food business, ostensibly the company's shining star which, on paper, should have received a Christmas boost?

M&S slashed prices on 200 lines before Christmas, but admitted it had not been competitive enough on everyday lines to lure in cash-strapped shoppers.



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