M&S: M&S''s clothing sales to fall again as UK grocers show resilience
Britain''s Marks & Spencer is
expected to report another fall in comparable clothing sales in itsChristmas
quarter, though the major grocers are forecast to report solid trading as
cash-strapped consumers prioritised spend on food and drink.Christmas trading
updates from British retailers so far have been mixed. Clothing chain Next
provided some initial cheer, beating expectations and upgrading its profit
forecast. But the mood was quickly soured by a profit warning from department store chain Debenhams.
With Britons being squeezed by slow wage growth and a jump in inflation that
followed the 2016 Brexit vote, overall expectations going into the key
Christmas trading period were subdued."Consumer confidence is low, and
shoppers have exercised extreme caution or shopped strategically online, rather
than visiting bricks-and-mortar stores or making impulse purchases. As such
retailers, and in particular fashion retailers, have felt a fall in footfall
and consumer spend," said Sophie Michael, head of retail and wholesale at
BDO, the business advisory firm.
With
investors concerned about a further squeeze on spending in 2018, they will
focus on retailers'' comments on the outlook.For M&S''s third quarter to Jan.
6 analysts are on average forecasting a 3.4 percent fall in like-for-like
clothing and home sales - much worse than the previous quarter''s 0.1 percent
fall. Analysts are also forecasting a 1.1 percent drop in like-for-like food sales -
a fourth straight quarter of decline.
M&S, which said in November it would speed up store closures and
re-position its food offer, will likely point to harder comparative numbers
with last year in the third quarter compared to the second and the tough
overall market when it reports on Thursday."Like-for-like declines in both
core segments...will not help spark a reassessment of the bear case, but we
think the numbers would be respectable given the starting point and the market
context," said analysts at Barclays.
Source: Etretail.com,India
Tuesday, 09 January 2018