M&S's sales have continued their decline in the 14 weeks to July 7, falling by 2.6%. The only highlight for the beleaguered UK chain has been in food sales, which grew 5.9%. Sadly, this did little to compensate for the 9.1% drop in clothing, footwear and gift sales. Plans to develop a set of new food-only stores are looking more and more appropriate, allowing M&S to place more emphasis on one of its major strengths.

Over a year ago, Chief Executive of Marks and Spencer Luc Vandevelde gave himself two years to turn around the declining company. Now, this optimism has gone and Mr Vandevelde is hoping for more realistic "pockets of success" by next May. Sales at M&S are continuing to fall: the latest figures, released before the annual meeting, show an overall drop of 2.6% for the 14 weeks up to July 7. Clothing, footwear and gift sales were particularly poor, falling 9.1%. The figures came in worse than expected, continuing the chain of disappointing results.

Despite ongoing efforts to spruce up the women's clothing department, customers have been unconvinced. Sales of women's wear fell by around 10% last year and continue to decline. M&S is now highlighting the appointment of George Davis, whose Per Una clothing line will be on sale in October. The company is hoping this range will be the one to start drawing in the younger, more fashion-conscious consumers. M&S's autumn range will also include "classically stylish" clothes for older customers. However, reviews have been mixed and the odds for the coming season being the big success M&S is after seem no better than before.

Admittedly, M&S managed to improve the primary margin on clothes by 3%, through more cost-effective purchasing and better stock control. However, margins have been lower than its rivals' for quite some time and the company is still relying heavily on markdowns for unsold stock, leaving too little of the improvement filtering down to the bottom line.

Much better news is that food sales were up 5.9% for the period. This is partially attributable to the foot and mouth crisis encouraging purchases of higher-quality meat products. But as the food business becomes increasingly important to M&S, it seems wise to utilize this resource as much as possible. The company is currently trialing two food-only convenience stores - which could well be the shape of things to come.

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