Work on the supply chain is having an effect on the bottom line at Marks & Spencer, according to its first quarter trading statement.
“As a result of better stock control, sourcing and supply chain management, we now expect the full year gross margin to be 50 to 100bps lower than last year,” it said.
“We are continuing to manage costs tightly, although better than planned volumes are expected to lead to an increase in full year operating costs of 0 per cent to 1 per cent, excluding bonus. Capital expenditure for this year is still expected to be around £400m.”
Total group sales were up 2.7 per cent while UK sales were 1.9 per cent higher for the first quarter.
Chairman Sir Stuart Rose said: “We are pleased to report continuing improvement in our performance. This demonstrates that the actions we are taking are working.
“While there is more visibility in the marketplace and consumers appear more confident, we continue to be cautious about the outlook. We expect 2010 to be a tough year and we will continue to run the business accordingly.
”As we approach our key Christmas trading period, we are recruiting an additional 20,000 seasonal employees to help us deliver a great Christmas to our customers.”