Marks & Spencer is pinning its hopes for a resurgence in the food market on promotions such as its ‘Dine in for £10’ offer, after the high street giant announced a drop in first-half profits of more than a third.
M&S confirmed the fears of investors after pre-tax profits fell by 34% for the past six months to £291.8m, down from last year’s figure of £451.8m.
The high street giant said today that first-half sales had dipped by almost 6% on a like-for-like basis, including a drop of 5.3% on food.
M&S said raising its game in food was a key priority for the business, with plans for a fightback set to include “fewer, larger, more targeted promotions” in the mould of its ‘Dine in for £10’ offer. M&S also said it had cut prices on more than 500 items over the first half of the year.
Overall UK sales fell by 1.1% although strong international growth of nearly 24% meant total revenue was fractionally up to £4.22bn.
Executive chairman Sir Stuart Rose said he was “confident we have the right plan to bring M&S through these difficult times”.
“We have a strong balance sheet underpinned by significant property assets and a secure funding position. We also have a strong brand and believe we are well positioned to compete by improving our operational delivery and continuing to focus on quality, value and choice,” said Rose.
“Trading throughout October has been volatile with recent events in the financial markets and their impact on the wider economy further weakening consumer sentiment. We remain cautious about the outlook for the remainder of the year.”