British retailer Marks & Spencer reported a surprisingly big jump in sales during the second quarter of its financial year, driven by clothing and food items, but warned yesterday about the outlook.
Sales on a like-for-like basis, which strips out the effect of new floor space, rose 5.3 per cent in the 13 weeks to October 2, M&S said in a trading update.
“Marks & Spencer has had a good second quarter, growing market share across all parts of the business. Customers are returning to quality,” said M&S chief executive officer Marc Bolland.
“In food, they are responding well to our better value and innovation, and in clothing are increasingly choosing M&S’s great fashions and quality that lasts.”
However, the group warned that trading conditions were getting tougher, amid a looming increase in value-added taxation (VAT) on goods and services in January, and consumer sentiment also hit by government spending cuts.
“Trading conditions ahead are likely to become more challenging,” M&S warned in the statement.
“Consumers’ disposable incomes will come under greater pressure from increased VAT rates and public spending cuts.
“We are facing increased commodity prices and significantly tougher comparatives in the second half.
“As a result we remain cautious about the outlook for the remainder of this year and next.”