Top marks for cut-price Primark but profits at M&S are plummeting

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The contrasting fortunes of two of Britain's biggest and best-known retailers were revealed in financial results announced today.

Marks & Spencer's pre-tax profits were down 44 per cent to £307.8 million in the first half of the year - Primark's were up 17 per cent at £233 million.

George Weston, chief executive of parent company ABF, said he was delighted with the growth of Primark, which has won an unrivalled reputation for converting catwalk designs into highly affordable fashion in a matter of weeks.

Like-for-like sales were up four per cent over the year to 13 September.

Mr Weston said top-sellers have included a £6 check shirt and a £35 trench coat and added that there would be four more stores in the UK by Christmas. "Primark has always done well in good times, it's done well in bad times," he said. "The range is as good as it's ever been and the consumers love it. We are taking consumers from all our rivals."

M&S chairman Sir Stuart Rose said: "The economic environment has changed dramatically and we are now facing the most difficult economic conditions since the early Nineties."

Sales of "general merchandise" -mainly clothing - were 6.4 per cent down on last year. But M&S said it had been able to hold on to its cherished status as Britain's biggest clothes retailer with a 10.9 per cent market share.

M&S's food sales were down 5.3 per cent in the first half of the year as shoppers searched for better value elsewhere. Its share of the grocery market slipped from 4.3 per cent to 4 per cent.

The company said it is now concentrating on price cutting. It has dropped prices on 530 products, about 10 per cent of its range, mainly everyday staples.

Sir Stuart said: "In the current market, customers are increasingly concerned about value and we know we have to respond accordingly."

Marks has been criticised for being slow to respond to shoppers' concerns about rising food bills and tighter household budgets. Sir Stuart added: "We remain cautious about the outlook for the rest of the year."