LONDON – Marks & Spencer had a 6.1 percent drop in same store sales in the U.K. in the quarter ending Sept. 27. The company’s general merchandise same store sales, which include clothing, also fell 6.4 percent, while same store food sales fell 5.9 percent.
“Consumer confidence remains fragile and the retail environment unpredictable,” said Stuart Rose, chairman of M&S, Thursday. “Consumers are increasingly cautious about their budgets.” Rose said that the company is now taking “a more promotional stance,” and will also lower its capital expenditure for the current financial year, from an expected 900 million pounds, or $1.5 billion, to around 700 million pounds, or $1.2 billion. For the 2009 financial year, Rose said the company expects to spend about 400 million pounds, or $706 million.
Overall retail sales for M&S in the U.K. fell by 1.6 percent during the quarter, while clothing sales fell 3.5 percent and food sales by 0.5 percent. Sales of home products rose by 2.9. Online sales, meanwhile, rose by 34 percent, while international sales were up 24.2 percent.
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A research note issued by analysts at Citi in London described the sales figures as “slightly better than forecast.” M&S’s share price rose 10.23 percent to 231.7 pence, or $4.09 per share, on the London Stock Exchange Thursday morning following the news. The company will report interim results for the 2008 financial year November 4.