Britain's M&S posts rising sales despite snow

11th January 2011, Comments 0 comments

British high street chain Marks & Spencer said Tuesday that last-quarter revenues climbed four percent, despite freezing weather over Christmas, after enjoying its best-ever day for food sales.

In the company's home market, sales on a like-for-like basis -- stripping out the effect of new floor space -- increased by 2.8 percent in the 13 weeks to January 1, the clothing-to-food retailer added in a trading update.

That beat market expectations for a 2.5-percent increase, according to analysts polled by Dow Jones Newswires.

"Marks & Spencer traded well through the important Christmas period despite the severe weather as customers continued to return to M&S quality," said Chief Executive Marc Bolland in the statement.

"We delivered a great Christmas for our customers, from our stylish occasionwear to our innovative festive food."

The company, which is regarded as a barometer of consumer sentiment in Britain, added that festive promotions lifted food sales to a record level on December 23.

Sales of food items surged to more than £50 million (60 million euros, $78 million) as Britons had snapped up items ahead of Christmas Day.

M&S said it was boosted by new festive food ranges, while regular promotions like half-price champagne had "proved to be extremely popular".

The retailer admitted that snowy weather had hampered the performance of general merchandise, but this was offset by the positive impact of seasonal price reductions in the post-Christmas sales.

Looking ahead, the group was cautious and predicted tough trade in the coming months as consumers react to British government's recent VAT sales tax hike and deep public spending cuts.

"We continue to expect the trading conditions ahead to be more challenging as consumers' disposable incomes come under pressure from increased VAT rates and the impact of public spending cuts," it added.

"In addition, we are facing increased commodity prices and significantly tougher comparatives.

"As a result we remain cautious about the outlook but are confident that we are well positioned to meet the changing needs of our customers."

© 2011 AFP

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