Marks and Spencer has revealed a sharp drop in clothing, gifts and homewear sales 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 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.
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.”
Analysis – losing out to John Lewis and House of Fraser
Dan Wagner, CEO and Founder of Powa Technologies comments: “In an age where next-day delivery and click-and-collect is a norm for many consumers, Marks and Spencer have failed to perform at the worst time of the year. At the back of thirteen successive quarters of falling sales in its clothing division, M&S was frankly caught napping in its strategy for the recent festive period.
“Consumers expected more from M&S and this failure to provide customers with a quick and convenient shopping process will not help in the stricken retailers’ recovery process. The delivery issues in this crucial period have not only had a detrimental effect on their sales figures but also on M&S’s reputation, something which it could always rely on in the past.
“It was not the only retailer to suffer over the Christmas period, with other companies experiencing a drop in sales over the same period. Convenience was the dominant trend during the festive period, demonstrated by the surge in online sales and increase in shopping at local express stores.
“Those retailers who came out on top over Christmas such as John Lewis and House of Fraser implemented a multi-faceted, digital approach focusing on in-demand services such as click-and-collect and allowing consumers to take control of their shopping experience, from start to finish.