Marks & Spencer is tale of two contrasting businesses, says Kantar Retail

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Marks & Spencer: profits fall

Marks & Spencer: tale of two businesses?

Marks & Spencer’s first quarter performances in food and general merchandise show it continues to be a tale of two contrasting businesses in the UK, according to Kantar Retail.

While like-for-like food sales increased by 1.7% in the 13 weeks to 28 June 2014, sales of general merchandise fell by 1.5% on a like-for-like basis and online sales dropped 8.1%, following the relaunch of M&S.com.

Himanshu Pal, retail insights director for Kantar Retail EMEA, said: “M&S continues to be a tale of two contrasting businesses in the UK. While M&S Simply Food is delivering good like-for-like sales for a 19th consecutive quarter, general merchandise is still struggling.

“Store refurbishments and a new focus on quality and style have all helped but not enough to pick up M&S from the sales doldrums. In an effort to preserve margins, the retailer has avoided too many promotions, leaving savvy shoppers seeking out cheaper alternatives such as Primark.  

“The dip in online sales is due to availability and navigation issues on its new website but M&S should reap rewards from its strategy in the next six months as the future of general merchandise is definitely online.”

International sales increased by 4.7% in the quarter, driven by  a “particularly strong performance in priority markets”, said Marks & Spencer.

“While the UK remains at the core of M&S’s activities, international growth, driven by franchise agreements, is making significant strides,” said Pal.