Website problems hit M&S sales
Marks & Spencer admits that problems with its new website impacted clothing and homeware sales over the past three months as its general merchandise division, which includes clothing and homeware, posted its 12th consecutive quarter of declines.
The retailer said UK sales at stores open for more than a year were up 0.3 per cent and 2 per cent in total. However, general merchandise posted a 1.5 per cent decline in like-for-like sales, while total sales dropped 0.8 per cent.
Sales at M&S’s online business fell 8.1 per cent in the 13 weeks to the 28 June despite a £150m investment in its new website, which relaunched in February. The retailer warned in May that it expected online sales to be impacted as it ironed out issues with the website and consumers got used to the new look, which includes a greater focus on content.
Marc Bolland, M&S chief executive, says online sales are unlikely to improve until its “peak trading period” in the run-up to Christmas.
“We have seen a continued improvement in clothing, although as anticipated the settling in of the new M&S.com has had an impact on sales,” he adds.
The results are likely to pile more pressure on the retailer ahead of its AGM later today and lead to further questions over the decision to promote ecommerce boss Laura Wade-Gery to head up its entire retail business. Analysts have labeled the poor online sales as “disappointing” and questioned the strategy behind the new site, especially given that the market overall is experiencing double-digit growth.
Conlumino retail analyst Neil Saunders calls the new M&S.com a “literal victory of style over practicality”.
“It succeeds in showcasing ranges and presenting outfit ideas but it falls down in the more critical function of making it easy for customers to purchase. Indeed, there are some parts of the site where it is extremely difficult for customers to understand the path they need to take to buy product,” he adds.
Bolland says sales were also pulled down by a reduction in promotions as it focused on full-price sales at both its stores and website. He claimed this has led to an increase in womenswear sales, although did not break out numbers.
Overall clothing sales were up 0.1 per cent in total but fell 0.6 per cent on a like-for-like basis.
M&S’s food business continues to grow, with like-for-like sales rising 1.7 per cent and total sales increasing 4.2 per cent. The retailer credits its strategy to be “more specialist” and focus on “quality and innovation” for the strong performance in food, helping set it apart from the competition and outperform the market. M&S remains on track to open 150 new M&S food stores over the next three years.
International sales also saw strong growth, with sales up 4.7 per cent. M&S says its full-year guidance remains unchanged despite “challenging” market conditions.