The company has reported record online sales, with 7.4 million accessing the site. This success however was offset by an overall slowing of growth and a fall in pre-tax profits of a fifth.
Despite a plan to turn the company around, and a significant increase in ecommerce sales, investors were disappointed in the retailers recent results. This was predominantly due to the cost of the planned turnaround.
Mobile continued to be its fastest-growing sales channel, while shoppers increasingly use more than one device when they buy. But while online sales grew by 23.4 per cent over the year, growth slowed to 8.2 per cent in the fourth quarter, contrasting sharply with first-quarter growth of 38.7 per cent.
That’s a slowing in online sales that M&S acknowledged in its full-year results statement. “We are operating in difficult and challenging times – consumer confidence has dipped, the clothing market is flat, online sales have slowed and there’s deflation in the food market,” it said. “Our customers are changing too as they become increasingly style and healthy conscious, shop around and expect more.
“Analysing the shopping habits and behaviours of the 32 million customers who shop with us has shown that they carry a deep-rooted affection for M&S but, for some, M&S is no longer their first choice.”
The retailer said that by listening to its shoppers it had found common themes and insights that now form the basis of plans that aim to make “every moment special for our customers”.
That will include putting customers at the heart of M&S, while also taking action to improve clothing and home sales, improving products and the customer experience while cutting prices, and growing food sales through measures including building convenience.
Chief executive Steve Rowe warned that taking action by increasing staffing and reducing prices would impact short-term profits. He added, “We are, however, confident that our commitment to delivering the right product, price and service will help return clothing and home sales to growth.”
The update came as M&S reported group revenue of £10.4 billion in the year to March 26 (and £10.5 billion in the 53 weeks to April 2), of which £9.3 billion (£9.5 billion, 53 weeks) came from the UK market and £1 billion (£1 billion, 53 weeks) from international sales.
Across the group, revenues were 0.8 per cent up in the year: UK sales in the year were up by 1.1 per cent, but international sales were down by 2 per cent. Pre-tax profits of £483.3 million were down by 19.5 per cent (£488.8m, 53 weeks, -18.5 per cent).
On the bright side however, more than 4 million customers have so far signed up for its new Sparks membership club, which promises to personalise benefits for customers.