The companyâs shares plummeted 19 per cent on Wednesday morning after like-for-like sales fell 2.2 per cent in the 13 weeks to December 29. General merchandise was down 3.2 per cent and food fell 1.5 per cent.
The retailer has spentÂŁ1.5 billion on store refurbishments over the past three years and had planned to invest anotherÂŁ1 billion in the business in the next financial year. However, finance director Ian Dyson said the timing of the spending was being revisited. âItâs under review. In different economic environments, weâll look at our operating cost base and our cap ex,â he said.
Chief executive Sir Stuart Rose added that this wouldnât mean a halt to spending, but said: âAs prudent managers, we have to look at our housekeeping and ask: âcan we afford to do this, this, this and this this year, or shall we put some things back to next year?ââ
Rose was downbeat about the prospects for the year ahead, although he insisted M&S would still outperform the market. âThe market has seriously softened and weâre in for a tough time in terms of the economy,â he said. âWe are planning on having a tough time until spring 2009.â
He said there had been intense price deflation in non-food and that, in volume terms, like-for-like sales had grown and market share had been maintained. However, he warned: âWhere we tookÂŁ100 last year, weâve takenÂŁ94 this year. Youâve got to run very hard to stand still.â
M&S was criticised by analysts for its lacklustre like-for-like food performance, which Rose attributed to new floor space affecting sales from existing stores.
âThere is some cannibalisation. No, Iâm not happy with it, but weâve got some plans to mitigate that.â Total food sales were up 5.1 per cent.
Asked about his own future, Rose failed to commit himself beyond next year â when he will pass five years running the business â increasing speculation he will decide to call it a day in 2009. âI havenât done four years yet. When Iâve got past four, itâs legitimate to ask me the question,â he said.
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