Marks & Spencer has revealed a fall in underlying pretax profit to £315.2m from £348.6m in the 26 weeks to October 1 as the retailer invested in offering customers value for money in light of the depressed economy.
Like-for-like UK sales excluding VAT edged up 0.5%, with general merchandise - including fashion - down 1.3% on a like-for-like basis, and food up 2.1%.
The retailer referred to the current environment as “challenging” as it reported total UK sales, excluding VAT, were up 1.6%. Group sales increased 2.4% to £4.7bn.
Total sales in general merchandise were down -0.8% while revenue in food was up 3.9% in food in the half.
Marks & Spencer said that it invested in offering customers better value in a highly promotional market during the period. The retailer also said that, despite tough comparitives, in managed to maintain market share in clothing and food.
During the half-year period, M&S launched its first ever first fast fashion collections in its M&S woman range in a response to customer demand, as well as re-launching all of its clothing sub-brands alongside its in-store presentation pilot in 15 stores, to separate clothing brands and give them each their own dedicated area.
In a statement M&S chief executive Marc Bolland said: “In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.
“Against a challenging consumer backdrop, we took decisive action to manage the business through the short term while continuing our focus on investing in creating a stronger platform for future growth.”
Online sales at M&S Direct were up 11.7% during the period with over three million visits to the retailer’s website per week. International sales were also up 9% with strong like-for-like growth reported in key markets. The retailer’s French website was launched in October and its Paris store is set to open before Christmas.
Bolland was upbeat ahead of Christmas. He said: “We have a very exciting Christmas product offer for our customers with more innovation and choice than ever before.” M&S launched it Christmas ad featuring X Factor contestants at the weekend.
The retailer seaid that it’s second half performance, so far, has been in line with it’s expectations. It said it will continue to focus on tight control of costs and stock. M&S will update its third quarter sales results on January 10, 2012.