Marks & Spencer’s sales fell more than 7% in the run-up to Christmas as the retailer suffered from the November foreclosure in England and tightened restrictions across much of the rest of the UK.
Apparel and home sales fell 24.1 percent while the food division advanced 2.6 percent in the last quarter of the year. During the UK lockdown, sales of food and non-food products fell 4.5% and 40.5% respectively.
M&S said the pandemic continues to change people’s shopping habits, with clothing sales shifting heavily towards sleepwear and casual wear.
The high street favorite also revealed he was hit with Brexit paperwork with Percy Pig candy falling in breach of EU rules of origin. The rules impose tariffs on goods that the UK exports to the EU that are not produced in the UK.
M&S boss Steve Rowe has warned that some products sold to customers in EU states will attract tariffs and require very complex administrative processes.
He said the UK’s new business relationship with the EU “would have a significant impact” on M&S activities in Ireland, the Czech Republic and France.
However, he said that despite the shocks of Brexit and Covid, M&S had experienced a “robust” Christmas season.
“Most importantly, under the clouds of Covid, we have seen very good performance from the food business, including Ocado retail, and further acceleration of clothing and home online.”
Looking to the future, Rowe said: “In the short term, trading remains very difficult, but we continue to accelerate change as part of our Never The Same Again program to ensure that the business emerges from the pandemic in a very different form. ”
In the grocery sector, the retailer saw mixed results, with take-out food sales declining in cities and town centers as office workers stayed at home.
But there were strong sales in the four weeks leading up to Christmas – up 8.7% – especially at large retail parks and Simply Food stores, which have remained open throughout as essential retailers.
M&S added that the apparel and home division repositioned its lines and the 46.5% drop in store sales was partially offset by a 47.5% growth in online sales. This included an increase in the number of items sold at full price.
International revenues fell 10.4% due to global Covid-19 restrictions, and the company warned the new UK-EU free trade agreement was causing issues with “potential tariffs on part of our range exported to the EU, as well as complex administrative processes ”.
Additional reports by the PA