Jan 09 - Declining sales have hit two top UK retailers. Hayley Platt looks at the problems facing Tesco - the world's third biggest retailer - and Marks & Spencer - where clothing sales have fallen for a 10th consecutive quarter.
Suits to rival London's Savile Row - that's one of the latest ideas from Marks and Spencer. A relatively expensive menswear range will go on sale in the autumn. The 130-year-old UK retailer hopes it'll attract new customers - it certainly needs a winner after another set of poor results. A 2% drop in clothing and homeware sales was well below forecasts and a 10th consecutive fall. Bryan Roberts from Kantar Retail says the problem is M&S's failure to impress its traditional customers. SOUNDBITE: Bryan Roberts, Retail Director, Kantar Retail, saying (English): "What M&S really needs to do is rekindle the affection of middle England and particularly female shoppers, get them back into the store spending a lot more money on basic outfits and the broad family clothing requirements." M and S blamed poor weather and heavy discounting. But the retailer only avoided a profit warning because of strong results from its food division. It all piles the pressure on Chief Executive Marc Bolland. SOUNDBITE: Bryan Roberts, Retail Director, Kantar Retail, saying (English): "Despite all of these efforts, despite the new people, the new ranges, the new marketing, the new merchandising there is still no fundamental recovery in women's wear sales at M&S. He might have until May to turn things around or he might have until 2015, but I think the clock is definitely ticking." There's also pressure on Tesco's CEO Phillip Clarke. Trading slumped almost two and half percent, the bottom end of expectations. The world's third biggest retailer was squeezed by discounters on one side and more upmarket food retailers - like Marks and Spencer - on the other. The news pulled shares down almost three percent. SOUNDBITE: Bryan Roberts, Retail Director, Kantar Retail, saying (English): "The whole market is struggling. There are very small pockets of strong growth, that is more upmarket players like Waitrose and the discount retailers are doing very well taking market share away from everyone." Tesco can take comfort from the fact that its three main rivals - Walmart's Asda, Sainsbury's and Morrisons - are all thought to have lost market share in the run up to Christmas. Britain's economy may be improving but wages aren't keeping up with inflation meaning consumers have less money to spend.