Falling fashion sales hit M&S

The retail giant blamed a tough October for a 2.8 per cent fall in like-for-like clothing and home sales over the 13 weeks to December 30, while it said ongoing under-performance in its food arm saw sales fall 0.4 per cent.

But the declines were not as bad as some feared, following recent profit warnings from the likes of Debenhams, Moss Bros and Mothercare.

M&S said a pick up in trading over the key Christmas weeks helped make up for a weak clothing market and more difficult trading in its food business, with consumer spending under pressure amid a squeeze on budgets from inflation.

Steve Rowe, chief executive, said: "M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing under-performance in our food like-for-like sales."

He said the group remains on track to meet full-year profit expectations.

Richard Lim, chief executive of Retail Economics said: “These disappointing results suggest all is not well on the high street. Christmas trading was hampered by the continued squeeze on personal finances as five-year highs in inflation eroded spending power.

“M&S continues to struggle with the sheer pace of structural change reshaping the industry. The business model has come under increasing strain as the unforgiving shift towards online and the experience economy collide with inflexible leases, high rents and excess properties."

Analyst Adam Tomlinson at Liberum said: "A tough October impacted and the business carried more stock into its December sales than planned. However, management notes its strategy to restore price integrity and value is having some success, helping to grow both in-store and online revenue in the weeks up to Christmas.

"Trading pressure continued into the lead up to Christmas. Price investment and a good performance in seasonal lines helped late trading."