M&S Online Delivery Woes Hurt Xmas Sales

Written By Unknown on Kamis, 08 Januari 2015 | 20.14

Marks and Spencer has revealed a sharp drop in clothing, gifts and homewear over Christmas, as it held back on discounting and suffered online delivery woes.

The retailer also blamed an unseasonably warm autumn for a weak clothing performance as it outlined a 5.8% slump in like-for-like sales in its general merchandise division during the 13 weeks to 27 December.

M&S, which insisted its winter clothing range was well received, said disruption at its Castle Donington online distribution centre in Leicestershire hurt its performance in December.

Customers complained that they were not able to make in-store click-and-collect orders for the next day, while deliveries to home addresses, which normally take three to five days, were taking up to 10 days.

M&S said it had made progress in addressing the issues, which were fuelled by Black Friday demand at the end of November, and insisted its delivery services were now back to normal.

The company added: "We deliberately held back the level of discounting, especially in December.

"While this had an adverse impact on sales we delivered a good performance on gross margin."

The retailer had also previously warned that it would take time for its new website, which required members to re-register, to bed in but said it had performed well.

Its food division - which has been a consistent performer - delivered record sales growth of 17% over Christmas week but rose only 0.1% in the quarter.

Analysts had forecast an increase of 0.9% and its share price fell 3% when trading began on the FTSE 100.

Chief executive Marc Bolland said: "M&S had a very good Christmas in food.

"We delivered record Christmas sales, strongly outperforming the market.

"We had a difficult quarter in general merchandise, dominated by unseasonal conditions and an unsatisfactory performance in our e-commerce distribution centre.

"We maintained our focus on general merchandise gross margin, with guidance unchanged."


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