Donington disruption hits M&S Christmas dot-com sales

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Disruption at the Castle Donington distribution centre hit dot-com performance at Marks & Spencer in December, leading to a 5.9 per cent fall in dot-com sales for the 13 weeks to 27th December.

Castle Donington parcelThe General Merchandise business was also affected by unseasonal conditions hitting clothing sales resulting in an overall fall of 5.4 per cent for the period.

Chief executive Marc Bolland said: “M&S had a very good Christmas in Food. We delivered record Christmas sales, strongly outperforming the market. We had a difficult quarter in General Merchandise, dominated by unseasonal conditions and an unsatisfactory performance in our e-commerce distribution centre. We maintained our focus on General Merchandise gross margin, with guidance unchanged.”

M&S said that while there had been disruption at Castle Donington, the new web site performed well operationally, even through periods of peak demand.

On Castle Donington, it said: “We have already made progress in addressing this and have now returned to our improved delivery proposition.”

Food was a bright spot with a 2.8 per cent sales rise. M&S also said that it deliberately held back on the level of discounting, and while this had affected sales, it has resulted in a good performance on gross margin.

How retailers have fared over Christmas

Period: 6 weeks to 03/01/2015
Total like-for-like sales: -0.3 per cent
Grocery home: +12.9 per cent
General merchandise Online sales: : 22.2 per cent
Clothing Online sales: : +52.4 per cent

Period: 14 weeks to 03/01/2015
Total -0.4 per cent
Like-for-like: -1.7 per cent

Period: 5 weeks to 03/01/2015
Total sales: +7 per cent to £728m
Like-for-like: +2.8 per cent

John Lewis
Period: 5 weeks to 27/12/2014
Online sales:  +19  per cent
Total +5.8 per cent to £777m

House of Fraser
Period: 3 weeks to 28/12/2014
Stores: +3 per cent
Online sales: : +57.7 per cent
Total like-for-like: +7.3 per cent
(Described it as best Christmas ever)

Period: 58 days to 28/12/2014
Retail sales: +0.5 per cent
Online sales: : +7.5 per cent
Total: +2.9 per cent
(Expects 11.5 per cent increase in pre-tax profit to £775m for full year to Jan 2015.)

Majestic Wine
Period: 10 weeks to 05/01/2015
Total +3.7 per cent
Like-for-like: +1.1 per cent
(Had to cut prices to remain competitive)

Thorntons issued a profits warning before Christmas citing challenges in the UK Commercial channel within its FMCG division affecting its sales performance.  Alongside a reduction in previously indicated orders from major grocers, it said: “We encountered significant short-term difficulties with our new centralised warehouse which resulted in disruption for all our customers. In particular in our UK Commercial channel we experienced lost and late sales with consequent missed promotional slots and reorders. Our warehousing and distribution facility is now working normally. The move to a centralised warehouse was essential to meet current and future business patterns and growth. This will result in improved capacity and quality of service for our customers in the future. Timely management action has resulted in good control of costs and stocks. Christmas seasonal specialities have sold well and no significant excess seasonal stock is anticipated.”

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