UK: M&S reports rise in H1 food sales
UK food and clothing retailer Marks and Spencer has said first-half group profit before tax and exceptional items was up 19.6% at £308.2m (US$536.3m).
For the 26 weeks to 1 October 2005, total revenue (excluding VAT) was £3.65bn, up 0.6% from a year earlier. UK sales slid 0.2% to £3.3bn, while international sales rose 8.6% to £348.5m. UK food sales rose 5.6% in the first half, or 1.6% on a like-for-like basis.
The company said that its food business continues to benefit from additional retail space as it extends the Simply Food format. Six Simply Foods were opened in the first half. Since the half-year, the company has opened six trial stores on BP Connect forecourts: a further two stores open this week. Initial performance has been encouraging, the company said. It is also opening a number of new initiatives in some existing Food Halls offering 'Hot Food to Go', an eat-over delicatessen counter and a new bakery concept.
M&S said it has launched 140 new lines to its already successful 'Cook!' range, which is totally preservative and additive free. It has also made recipe changes to 450 lines within its ready meals food range to remove all artificial flavourings, artificial colourings and hydrogenated fats: most of these lines already have no artificial preservatives. The company said its TV advertising campaign is reinforcing its quality credentials with customers.
In order to explore new opportunities to develop and broaden the reach of its food business, M&S said it is forming a new food development unit.
"When we updated the market on 11 October 2005, we said that the trading environment remained very difficult. This view has not changed," the company said.
Companies: Marks and Spencer
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