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M&S improves supply chain network after Christmas sales decline

M&S improves supply chain network after Christmas sales decline

Established retailer M&S has reported a 3.9% quarterly group revenue drop, with Christmas trading experiencing a decline as the high street continues to experience stiff challenges.

Group revenue in the 13 weeks to 29 December 2018 was £3.04bn, with UK revenue dropping 2.7% to £2.78bn. M&S said it has increased its focus on improving its delivery proposition and its Castle Donington distribution operations. Prioritising its supply chain infrastructure has meant that it reported a 14% uplift in Clothing & Home online sales.

The company also reported solid performance in October, with on-going actions to improve the flow of stock in its supply chain, resulting in a circa. 25% reduction in stock in to the December sale.

M&S CEO Steve Rowe said: “Our planned reduction in stock carrying levels meant that stock into sale was the lowest in five years.”

Of the company’s performance over the period, Rowe concluded: “Against the backdrop of well publicised difficult market conditions our performance remained steady across the period. Our Food business traded successfully over Christmas as customers responded to improved value. Our transformation programme remains on track.“

Debenhams festive like-for-like sales decline

Beleaguered retailer Debenhams has also reported a sales decline in the festive period, as it seeks to restructure its retail and store layout proposition.

In the 6 weeks and the 18 weeks to 5 January 2019, Group gross transaction value for 6 weeks to 5 January declined (3.8)% with group like‐for‐like sales down (3.4)%. In this period, the UK declined by (3.6)%, with weak store footfall offset by growth in digital. For the 18 weeks, group gross transaction value declined (5.6)%, with like-for-like down (5.7)%. The UK was down (6.2)% with International down (3.5)%. Digital sales have grown by 4.6% across the period.

In its results statement the company said: "he UK trading environment has continued to be volatile, as expected, with clear evidence that our customers have been seeking out promotions. As a result we reinstated some tactical promotional activity in order to be competitive and manage inventory tightly, which will result in some gross margin erosion in the first half."

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