Marks & Spencer’s boss Steve Rowe said his turnaround plan for the retailer was on track as its sales decline slowed in the first quarter and it scaled back discounting and end-of-season offers.
However, he cautioned that the mood among shoppers on the high street was “volatile” and that consumers were “very much shopping for now and cautious with their spend”.
Like-for-like sales in the company’s clothing and home division fell by 1.2% in the 13 weeks to 1 July compared to the same period last year.
But that marked an improvement on the sharp 5.9% decline seen in the previous quarter. The latest figures were partly helped by the timing of Easter.
Mr Rowe also said that while the overall figures showed a sales fall, full price purchases were up 7% with reduced discounting and no clearance sale.
He said: “Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year.”
Image: Marks and Spencer’s boss Steve Rowe launched a recovery plan last year
Meanwhile, the retailer’s food business, where it is expanding its presence with the opening of more standalone Simply Food stores, saw overall revenues up strongly.
However a like-for-like comparison of stores open for at least of year revealed a 0.1% decline.
Earlier this year, M&S reported a 63% plunge in annual profits as costly restructuring took its toll and sales slumped in the year ending 1 April.
Mr Rowe said at the time that the retailer was facing an “uncertain economic horizon” with consumers “quite fragile” – echoing concerns across the sector about the impact of accelerating inflation and stuttering wage growth on household finances.
The chief executive, a company veteran who became boss last year, has sought to turn around its fortunes with a plan that includes dozens of stores being closed or scaled back as well as hundreds of head office job cuts.
He has also poached Halfords boss Jill McDonald to lead its clothing, home and beauty division from this autumn and revealed plans for a small-scale trial of online food sales.
In May, M&S cheered investors with the appointment of former Asda boss Archie Norman as its next chairman.
The latest trading update comes as wider industry figures showed a pick-up for sales growth in June with the arrival of summer.
Like-for-like sales rose by 1.2% compared to the same month last year according to the data from the British Retail Consortium (BRC) and KPMG.
However the report said the growth in retail spending was mainly the result of higher food prices with shoppers more cautious about splashing out on non-essentials.
BRC chief executive Helen Dickinson said: “There’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Overall conditions for high street retailers remain pretty grim, with consumer purses under pressure and competition coming from all angles.
“M&S is swimming quite hard against this tide, so it deserves some credit for treading water.”
Source: Sky