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Top marks for cut-price Primark but profits at M&S are plummeting
Jonathan Prynn, Consumer Affairs Editor4 Nov 2008
CUT-PRICE high street store Primark is thriving in the harsh economic climate but its rival Marks & Spencer's profits have been devastated.
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."
Reader views (5)
I too stopped shopping at M&S after they started charging for plastic bags. I've since spent ovet £1200 in a competitor. I miss the food though...
- Martin H Watson, Teddington, 05/11/2008 08:48
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Marks' still make the best Knickers.. I have my sister bring them over for me!
And btw Josh... bring your own bags.. this cuts down on waste!
- Gillian, Florida, USA, 04/11/2008 17:16
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Here's an example for you, Mr Rose. Last Sunday in Primark at Oxford Street, I bought a beautiful cardigan for £8. An almost identical cardi at M&S Marble Arch costs £29. Now do you get it?
- Blue Baby, London, 04/11/2008 15:16
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In his cantos interview Stuart Rose mentions 'customers' 21-times. So if they are listening to customers maybe a packaging change is in the air??
- Green Sleaves, London, UK, 04/11/2008 13:56
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ive stopped shopping at m&s since they started charging for shopping bags. the bottom line is, we are being charged for the same thing twice. if people are daft enough to do that then they have more money than sense. we are already being charged for the cost of the bags, in the overhead element of all product costs at M&S. and if the environment was really a factor, M&S would drastically reduce the amount of packaging it wraps around food and other products.
- Josh, london, 04/11/2008 11:21
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