Great Grocer: Marks and Spencer (M&S)

by YankeeJim | April 6, 2011 at 04:58 am

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What makes a grocery store great?
High quality products is a start, then it is packaging, store layout and design, and convenience.
If you live in the UK, you have one of the best in the world in Marks & Spencer. I needed new socks and underwear during my long stay in London this year. No problem, I knew where to get them. At M&S – high quality.
Want ingredients for a Mexican dinner in London? No problem, chances are M&S have the ingredients. What they haven’t cured at M&S is rudeness from shoppers in England who bump you with their carts if you are in the way. Check out is kind of miserable too because you have to bag your own, and you had better be quick about it.

“Marks & Spencer exceeds market expectations with Q4 sales, but cautious about outlook By Associated Press, Wednesday, April 6, 5:06 AM
LONDON — British retailer Marks & Spencer surprised the market Wednesday as it reported that comparable sales in the U.K. rose 0.1 percent in the 13 weeks ending April 2, confounding analysts’ forecasts of a drop of 2.4 percent.

Shares in the company rose 4 percent on the news, to 353.9 pence in morning trading on the London Stock Exchange.

M&S said food sales rose 3.4 percent on a comparable basis — that is, excluding new stores and expansion — while general merchandise sales fell 3.9 percent. The analysts’ consensus was that food sales would rise by 1 percent and general merchandise sales drop 6.2 percent.

Including new store space, total sales in the U.K., which accounts for about 90 percent of the company’s volume, rose 1 percent in the period, the company’s fiscal fourth quarter. Total sales globally were up 2.3 percent.

Despite the upbeat numbers, the company remained cautious.

“Looking ahead to 2011-12 we expect the trading conditions to be increasingly challenging due to pressure on consumers’ disposable incomes and higher commodity prices. As a result we are cautious about the outlook,” the company said.

As a measure of the intense competition among stores, the British Retail Consortium said Wednesday that food prices fell by half a percent between February and March, as 40 percent of the items for sale were on special offer.

M&S said it had boosted its U.K. market share for clothing, footwear and accessories by 0.3 percentage point to 11.6 percent in the 12 weeks ending Feb. 20. Its share of food sales rose 0.1 percentage point to 3.8 percent.

Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, said investors were likely to be cautious about M&S’ prospects.

“With considerable structural changes such as the rise of the internet still to consider, competition intense, and the environment for consumers challenging, market consensus opinion currently denotes a strong hold,” Bowman said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.”