Sales at Marks & Spencer fell in the first half, with both clothing and food hit by disruption from the British retailer's latest attempt at a turnaround.
After more than a decade of failed reinventions, M&S is now targeting sustainable, profitable growth in three to five years and warned on Tuesday that sales were unlikely to improve soon.
"Trading conditions remain challenging and the headwinds from the growth of online competition and the march of the discounters remain strong in all our markets," it said.
Shares in M&S, which have fallen 4% so far this year, were down 1.1% at 0806 GMT.
M&S said that its full-year outlook was broadly unchanged as underlying profit rose 2%. It also maintained its interim dividend after reporting pretax profit before one off items of 223.5 million pounds in the six months to Sept. 29, ahead of analysts' average forecast of 203 million pounds.
But M&S sales slipped again, with clothing and home down 1.1% on a like-for-like basis and its gross margin down 20 basis points.
Increased Competition
M&S is dealing with the migration of clothing and home sales from stores to online along with unrelenting competition from supermarkets and discounters, fashion chains like Primark , Zara and H&M, as well as pure online players like Amazon and ASOS.
Pressure on consumer spending, a shift in expenditure towards experiences and away from clothing, as well as unhelpful weather trends has also hampered efforts to revive its business.
Like-for-like sales of food were down 2.9% - worse than analysts' expectations of a 2% fall. M&S said this reflected tough trading conditions, along with price cuts. Gross margin in the food division fell 25 basis points.
M&S launched its latest turnaround plan in November last year, two months after retail veteran Archie Norman joined as chairman.
The five-year programme of store closures and relocations aims to cut excess selling space in its clothing business; increased technology investment and includes moves to make a misfiring food business more competitive.
M&S is targeting 100 British store closures by 2022, as it strives to make at least a third of clothing and home sales online. It has said it could close even more as it manages its property estate more pro-actively.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
