London: Britain’s largest clothing retailer, Marks & Spencer Group PLC, said Thursday that sales had suffered their worst quarterly falls in nearly a decade, as Britons reined in spending amid rising unemployment and plunging consumer confidence.
Like-for-like sales in Britain dropped 6.1% in Q2, or 13 weeks to 27September, the company reported in a trading statement. The results are the poorest the retailer has had in nine years.
“Consumer confidence remains fragile and the retail environment unpredictable,” chairman Stuart Rose said. “Consumers are increasingly cautious about their budgets.”
To maintain profitability, Rose said the company is cutting planned spending for the year from as much as $1.6 billion to just $1.2 billion.
Marks & Spencer also expanded sales in several strong growth areas over the Q2. Online sales were up 34% and international sales rose 24%.
“Whilst these are not exactly glowing figures, they are not the over-the-cliff disaster which many investors had feared,” said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.
Because the company’s results were somewhat better than analysts were anticipating, shares rose 7.7% to $4.01 in early trading in London.
As of market opening on Thursday, the retailer’s share price had fallen 60% in the last 12 months.