This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7484700.stm
The article has changed 18 times. There is an RSS feed of changes available.
| Version 8 | Version 9 |
|---|---|
| M&S shares dive on gloomy outlook | M&S shares dive on gloomy outlook |
| (31 minutes later) | |
| The boss of Marks and Spencer has warned of "stormy times ahead" for the UK economy - as his firm said a slide in consumer confidence had hit sales. | The boss of Marks and Spencer has warned of "stormy times ahead" for the UK economy - as his firm said a slide in consumer confidence had hit sales. |
| M&S shares sank by more than 20% after the gloomy comments - with Sir Stuart Rose saying UK woes would be "more of a two-year problem than a two-month one". | M&S shares sank by more than 20% after the gloomy comments - with Sir Stuart Rose saying UK woes would be "more of a two-year problem than a two-month one". |
| Like-for-like UK sales dropped 5.3% in the past three months, M&S said. | Like-for-like UK sales dropped 5.3% in the past three months, M&S said. |
| Separate data suggested that high petrol prices had led to a drop in trips to out-of-town shopping centres. | Separate data suggested that high petrol prices had led to a drop in trips to out-of-town shopping centres. |
| According to figures from Experian's footfall index, visitor numbers fell by 5.8% in June from the same month a year ago. | According to figures from Experian's footfall index, visitor numbers fell by 5.8% in June from the same month a year ago. |
| Housebuilder Taylor Woodrow added to the negative sentiment hitting UK markets after it said it had failed to secure £500m of extra cash from shareholders. | Housebuilder Taylor Woodrow added to the negative sentiment hitting UK markets after it said it had failed to secure £500m of extra cash from shareholders. |
| Its shares lost more than half of their value in morning trading on the London Stock Exchange. | Its shares lost more than half of their value in morning trading on the London Stock Exchange. |
| Taylor Woodrow also said that it was closing a third of its offices and that demand for new houses had slumped. | Taylor Woodrow also said that it was closing a third of its offices and that demand for new houses had slumped. |
| Food focus | Food focus |
| M&S said conditions on the UK High Street were "challenging", and its comments prompted shares in other retailers, such as Sainsbury's and Next, to also fall sharply. | M&S said conditions on the UK High Street were "challenging", and its comments prompted shares in other retailers, such as Sainsbury's and Next, to also fall sharply. |
| M&S shares lost 20%, or 64.25 pence, to 253.75p in London. | M&S shares lost 20%, or 64.25 pence, to 253.75p in London. |
| Consumer confidence levels have deteriorated markedly and market conditions have become more challenging Sir Stuart RoseM&S chairman and chief executive Check M&S sharesCheck UK retailers' shares | Consumer confidence levels have deteriorated markedly and market conditions have become more challenging Sir Stuart RoseM&S chairman and chief executive Check M&S sharesCheck UK retailers' shares |
| "It's a simple problem. Customers are feeling the pinch," said Sir Stuart. | "It's a simple problem. Customers are feeling the pinch," said Sir Stuart. |
| "I do not believe any company will be immune. It's a UK Plc economic problem, indeed a world economic problem." | "I do not believe any company will be immune. It's a UK Plc economic problem, indeed a world economic problem." |
| M&S's food business - which focuses on top end produce - has been badly hit by customers cutting back on spending and the director of its food business is leaving the firm immediately as part of a management reshuffle. | M&S's food business - which focuses on top end produce - has been badly hit by customers cutting back on spending and the director of its food business is leaving the firm immediately as part of a management reshuffle. |
| General merchandise sales had also lost ground - but were in-line with the downturn seen by competitors. | General merchandise sales had also lost ground - but were in-line with the downturn seen by competitors. |
| "Food had previously been regarded as something of a flagship product, whereas consumers are clearly beginning to downgrade their shopping habits," said Richard Hunter of Hargreaves Lansdowne Stockbrokers. | "Food had previously been regarded as something of a flagship product, whereas consumers are clearly beginning to downgrade their shopping habits," said Richard Hunter of Hargreaves Lansdowne Stockbrokers. |
| Challenging conditions | Challenging conditions |
| Seymour Pierce analyst Freddie George said that it was inevitable there would be worries about the firm's position. | Seymour Pierce analyst Freddie George said that it was inevitable there would be worries about the firm's position. |
| He said that concerns will grow over "the strategy on food and the refurbishment programme, and the high debt levels of the group". | He said that concerns will grow over "the strategy on food and the refurbishment programme, and the high debt levels of the group". |
| M&S boss Sir Stuart Rose on sales figures and future prospects | |
| The High Street retailer had already expressed caution about consumer sentiment in May, when it said there had been a "mixed" start to its 2008/9 financial year. | The High Street retailer had already expressed caution about consumer sentiment in May, when it said there had been a "mixed" start to its 2008/9 financial year. |
| But Sir Stuart said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging". | But Sir Stuart said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging". |
| But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market." | But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market." |
| M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June. | M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June. |
| Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%. | Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%. |
| M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores. | M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores. |
| "Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said. | "Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said. |
| "In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives" | "In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives" |
| This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct. | This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct. |
| Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses. | Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses. |
| M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year. | M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year. |
| Have you changed your food shopping habits? Are you now shopping at budget stores? What are your experiences? Send us your comments using the form below. | Have you changed your food shopping habits? Are you now shopping at budget stores? What are your experiences? Send us your comments using the form below. |