M&S expected to report slowdown in UK

Marks & Spencer is expected to report a sharp slowdown in sales growth today as bad weather and interest rate rises take their toll.

The retailer, which only recently made a return to health after almost a decade of depressed sales, is reportedly set to show that sales are rising at their slowest pace for two years when it posts first quarter figures.

Retail analysts at Pali International are forecasting like-for-like food sales to be flat and clothing and general products to see like-for-like sales increases of just 1% to 2%.

Nick Bubb of Pali said: “Picnic and barbecue food has not been flying off the shelves, given the ghastly weather.”

He added that higher stock mark-downs were also unlikely to have prevented a decline in sales growth in clothing and said full-year profit expectations could be cut by 5% if sales have taken a marked knock.

A dip in sales growth threatens to derail M&S’ recovery just two months after the retailer posted a 28.5% rise in annual profits to £965.2m (€1.43bn), close to the £1bn (€1.5bn) seen in 1998 before the group hit more troubled times.

M&S’ potential woes could also be compounded by the reported planned departure of its Per Una womenswear range designer George Davies, who helped drive the group’s image revamp.

It is believed Mr Davies will not be renewing his contract when it expires later this year.

A departure of the Per Una boss, who also pioneered the George range at Asda, could strike a blow for M&S given the important role that Per Una played in the group’s revival.

M&S, which is also holding its annual general meeting for shareholders later today, reported a record £8.6bn (€12.7bn) in sales over the 12 months to March 31, helped largely by a 20% hike in Per Una sales.