However, there is increasing optimism that M&S is gaining ground on rivals as the benefits of chief executive Stuart Rose's revival strategy are felt.
Goldman Sachs analysts believe M&S will post a 4 per cent decline in general merchandise comparable sales next Wednesday. But the broker adds: 'We believe it is reasonable to expect M&S to stop losing market share in womenswear and menswear from now on.'
A price survey by the broker showed that M&S's entry-point prices for womenswear dropped from 37.2 per cent above market average in June last year to 12.9 per cent above in June this year.
Goldman Sachs analyst Richard Chamberlain said: 'Historically, there has been a fairly good correlation between price cuts and market share in UK apparel, excluding the impact of space growth.'
In menswear, M&S has dropped its entry-level price points from 44 per cent above market average in June last year to 7.1 per cent above in the same month this year.
Seymour Pierce analyst Richard Ratner expects M&S to post a like-for-like decline of between 7 per cent and 8 per cent in non-food next week. However, he expects only a 3 per cent fall for the year as a whole. He said: 'Stuart Rose can hit our top-of-the-range forecast [£680 million profit] as he has lower markdowns and additional supplier discounts up his sleeve, but that is with the caveat that sales do not keep declining at the current level.'
Evolution analyst Nick Bubb said Rose would be pleased if M&S's performance was no worse than rival Next's and thought a fall of 6 per cent was possible.
CSFB's Tony Shiret was more bearish. He wants to see how the forthcoming autumn/winter ranges play in stores. 'I'm interested in whether they are able to deliver better-looking product,' he said.
No comments yet