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M&S predicts a roller-coaster Christmas
Jonathan Prynn and Rosamund Urwin04.11.09
Marks & Spencer boss Sir Stuart Rose today predicted a “roller-coaster” Christmas for the high street, dampening hopes of a swift rebound.
Sir Stuart also announced that the chain would be stocking 400 branded grocery products ranging from Marmite to Coca-Cola for the first time in its 125-year history.
The M&S chairman said: “We recognise that customers want a one-stop shop. If they want Marmite or Tabasco sauce, we should be able to provide that for them. I know that there are some brands that we just must have.”
The retailer reported a small rise in profits for the six months to 26 September, beating City forecasts.
Profits before tax edged up to £298.3 million from £297.8 million in the same period last year.
Although the figures were better than expected, sending the share price soaring six per cent in early trading, Sir Stuart said he remained “cautious”.
“Christmas will be intensely fought between stores — it's going to be a roller-coaster ride until Christmas Eve.
“But I think customers are in a better position now and will want to treat themselves — they will be looking for quality products, not trivia.”
Sales at its food division were flat in the last quarter after two years of decline. Market share of food fell from 3.7 per cent to 3.5 per cent as it came under siege from Waitrose and cheaper supermarkets.
Sir Stuart said M&S had continued to shake off its reputation as an expensive place to do food shopping through price cutting and promotions.
It sold 4.5 million “dine in for two for £10” meals in the first half of the year and has also launched a £5 “pizza meal deal”.
He said: “We are cheaper than Waitrose on a basket of 1,200 like-for-like products … and have narrowed the gap between us and the rest of the market.”
General merchandise sales — mainly clothing — dropped 0.8 per cent in the same period.
But M&S said that it managed to hold onto its position as the nation's favourite clothes store, with just over a 10th of the market.
The improvement in trading leaves the store's staff on track to share a £60 million bonus pot.
Overall group sales rose by 2.8 per cent to £4.3 billion in the period. But like-for-like sales fell 0.9 per cent in Britain.
Big brands will tempt shoppers
Vince Passmore, 27, events manager from Wapping
"The brands will tempt more people. Now I'll get all my food in M&S."
Monique Lane, 23, admin worker from Woodford
"M&S isn't supposed to be Tesco. It is an institution which made it different."
Nisha Shah, 31, researcher, from Lambeth
"I come to M&S specifically for their brands so I hope they are not going to replace too many of them."
Elleanne Green, 45, artist from central London
"It was a problem for M&S not stocking the brands that people love."
Dennis Balent, 38, architect from Paddington
"I hope it will improve now they'll stock brands. There will be more choice, which is good."
Liam Nugent, 24, works in television, from Brixton
"It's taking its exclusivity away. It will be the same as every other shop."
