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| Marks & Spencer enjoys 'return to quality' • M&S says customers 'better prepared' for austerity• New chief exec pins hopes on older shoppers• Like-for-like sales up 5.3% • Clothes market share grows to 10.3%Marks & Spencer's new boss, Marc Bolland, today reported much better-than-expected sales figures but warned that the coming months will be tough as the government's looming austerity measures – public spending cuts and January's planned increase in VAT – threaten to shake consumer confidence.Bolland said M&S had been pulling in more customers, who are buying higher quality items, and that the store is profiting from its aging shoppers."Older customers are better prepared for tougher times," said the chief executive, who replaced Sir Stuart Rose in May. "They have seen it before and they have more savings."However, he added that the economy, together with rising commodity prices – such as cotton up 70% on this time last year – and "significantly tougher comparatives" will make sales gains harder to achieve in the coming weeks.And he warned City analysts not to increase their profit expectations, because the business was spending more on marketing and advertising.Nevertheless, M&S shares were the FTSE-100's second biggest riser, adding 19p to 410p, their highest level in more than two years and nearly double the level they were changing hands at 12 months ago.M&S said clothing, homewares and food all put in strong performances over the most recent three months, as M&S won sales from rivals.Bolland said he hoped to absorb the impact of rising commodity prices and VAT rates on some clothes, so that opening price points – the cheapest and most competitive products – will not have to go up.Bolland is currently working on a strategic review of M&S, which is expected to address key issues such as how to pull in younger shoppers, how to expand internationally, and whether to offer online grocery deliveries. It will be unveiled in four weeks, when the retailer presents its first-half profit figures.Echoing comments made earlier this week by his counterparts at Tesco and J Sainsbury, Bolland said he did not expect the government's spending cuts, to be unveiled on 20 October, to tip the economy back into recession. "No, we don't expect a double dip," he said. "Yes, we expect customers to have a more difficult trading environment but we expect to be well positioned."Tesco, Britain's biggest retailer, struck an upbeat tone on Tuesday, predicting a "slow and steady" economic recovery.Like-for-like UK sales at M&S climbed 5.3% in the 13 weeks to 2 October, with clothes and homewares roaring 7% ahead and food up 3.7%.Matthew McEachran, retail analyst at Singer, described the figures as "excellent" and "exceeding expectations".M&S cemented its position as Britain's biggest clothing retailer by increasing its share of the clothes market to 10.3% from 9.6%, helped by new products such as the "two sizes bigger" bra and "Miracle" crease-resistant linen. In the coming weeks it is hoping for bumper sales from new "front-enhancing" pants for men.The retailer also credited its latest advertising campaign, fronted by X-Factor judge Dannii Minogue, ex-footballer Jamie Redknap and Brazilian model Ana Beatriz Barros for driving more customers into its stores.The chain has just had a record autumn season for women's footwear, selling 300,000 pairs of boots – 50% more than last year.Bolland said knitwear and men's suits were benefiting from a return to quality: "With an uncertain environment people are choosing quality. They are choosing things that last, not just for a couple of days or a couple of months."In the foodhalls, about 370 products have been launched, including "In a Pot" ready meals, groceries and biscuits.International sales were up 6.2%, although trading remains difficult in Ireland and Greece.Neil Saunders, consulting director of Verdict, said the better-than-expected figures could mark the start of a new era. "To some extent, market conditions are now much more favourable to M&S and consumer trends should be to its advantage."In clothing, shoppers are more interested in quality and are willing to trade up; while in food, lower inflation means a less price sensitive consumer who is willing to buy more premium product," Saunders said. "Both of these things play into M&S's hands and, along with its development work over the past year, have helped to generate this set of positive numbers."However, he added: "The big question mark, and the big challenge for Bolland, is over how long can this performance be sustained. With the negative headwinds of government cuts on the horizon, the consumer environment is likely to become much tougher."Marks & SpencerRetail industryJulia Kolleweguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
'Unusual' bites to Saudi servant A servant allegedly murdered by Saudi prince in a London hotel had bite injuries of a pattern never seen before by an expert, a court hears bbc.co.uk |
Council tax benefit rethink may hit those on low income Chancellor's spending review targets half a billion pounds saving in a rebate shakeup to be implemented by local authoritiesThe chancellor sought almost half a billion pounds from the council tax benefits bill by asking councils to draw up plans that would affect millions of people on low incomes.The rebate is paid to people on low incomes – including lone parents, jobseekers and around 3.5 million over-65s who are mostly on pension credit. Council tax benefits are not small: on average they are worth a little less than £900 a year and in most cases means the poor live in a property without having to pay council tax.George Osborne will not say who loses out from this welfare saving: that responsibility will fall on the shoulders of local authorities who will have to make changes to the benefits' rules, which are so complicated that only two-thirds of those entitled to the money claim it today.Local authorities are to be given freedoms to make the savings, although academics warn this will simply be a way of shifting the blame from central to local government. At present councils pay out the benefit on behalf of the Department for Work and Pensions.Andy Sawford, chief executive of the Local Government Information Unit, said it was likely councils would probably choose to "stop paying to certain groups". "They could stop paying for long-term unemployed while paying for low-income married couples. It would be an interesting introduction of local diversity."Sawford said councils could cut 10% from bills but that would mean chasing poor people for "a few pounds a week".In a related move to save the taxpayer more than £200m,the government announced that single people aged 25 to 35 won't be able to claim housing benefit for a flat. Instead they can only claim for the cost of a single room in a shared house. Originally it applied to claimants under the age of 25 but this will be extended up to 35 – leaving many with few options beyond moving back home or moving in with flatmates.Experts say that the move will affect "thousands of young people" as housing benefit is claimed by anyone who does not have "capital or savings over £16,000". "Over the age of 25 I don't think many people want to be sharing," said Debbie Larner of the Chartered Institute of Housing. "I think 35 is a quite unreasonable cut-off point. The average age of home ownership is 37 so I cannot see how this helps with that."Council taxState benefitsSpending review 2010Tax and spendingWelfareRandeep Rameshguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
Swine flu response 'not an overreaction' Professor Sir Liam Donaldson: The swine flu death-count could have been much higher if we didn't deal with the problem the way we did. news.bbc.co.uk |
Airports back BA's call for relaxation of security The aviation industry has backed calls made by British Airways for America to relax its airport security checks. telegraph.co.uk |