M&S suffers fashion market share decline as Next grows

Marks & Spencer’s sales fell 0.7% in the period, when it lost 40 basis points of share to account for 10.8% of the market, Kantar Worldpanel data cited by broker Bernstein showed.

The wider market grew by 3.1% overall during the period.

It was the ninth consecutive quarter of year-on-year of market share decline suffered by M&S, observed Bernstein analyst Jamie Merriman.

The retailer’s share of the crucial womenswear category dipped 50 basis points. The broker said the Kantar data suggests “M&S has not yet done enough to change consumer perceptions of the brand”.

Next’s sales advanced 8.9% in the period.

Next gained 40 basis points of share to speak for 7.5% of the market following 13 consecutive periods of year-on-year advances. It recorded particular gains in menswear and kidswear.

The biggest winner in womenswear was River Island, which added 30 points of share year on year, to account for 2.2% of the market.

Primark’s sales growth of 2.3% lagged the market and was the second lowest quarter of growth since 2010. Its market share was flat at 4.7%.

The Kantar data emerged as Marks & Spencer prepares to update on quarterly trading on July 8, when it holds its AGM.

The retailer said at the time of its prelims in May that general merchandise sales in the first quarter would be affected by the launch of its new online platform, which was expected to take between four and six months to settle in.

It said that clothing sales in-store were still on an “improving trend” experienced in the fourth quarter, however.

Investec analyst Kate Calvert said in a note that she expects M&S’s general merchandise like-for-likes to be down in the first quarter.

She observed: “General merchandise sales continue to be held back by online, though we feel there has been a visible improvement in womenswear with better quality, styling and more backing of winners in depth.”

Calvert expected M&S’s performance to improve in the second half once the new website has bedded down.