M&S cuts its sales forecast as Irish and Greek sales decline

Poor Irish and Greek sales were cited by retailer Marks and& Spencer as it reduced its global sales forecast for 2012.

The move follows comparatively cautious projections from rivals Tesco and Sainsbury.

The UK retailer said international sales were up 5.8% last year, but noted poor trading conditions in Greece and Ireland were likely to continue due to shoppers feeling the pinch from rising prices, muted wages growth and ongoing austerity measures.

M&S’s new sales forecast came as it reported its first fall in full-year profit for three years, with consumers’ spending power reduced in all its markets.

The retailer, which also sells homewares and upmarket foods, yesterday said it expected a three- year growth drive announced in Nov 2010 to deliver an additional £1.1bn-£1.7bn (€1.4bn-€2.1bn) of sales, down from an original £1.5bn-£2.5bn target.

The projections are likely to profit before tax and one-off items dipped 1.2% to £706m in the year to March 31, cushioned by cost cutting and compared with a forecast for £694m. Full-year sales rose 2% to £9.9bn, with sales at British stores open over a year up 0.3%.

“Our international plans are on track, our multi-channel e-commerce plans are on track but the UK, simply because of the economic outlook has changed, is not completely delivering,” said CEO &Marc Bolland.

Last week — in response to the challenging environment — the retailer introduced its Simply M&S range to Irish and UK consumers, offering lower prices and greater choices across 800 products.


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