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M&S cautious on Budget impact

Wed, 2010-07-07

Financial Times

Bumper sales of summer knitwear and barbeque meats pushed up sales at Marks & Spencer in its first quarter, but new chief executive Marc Bolland said it was still too early to say how the UK’s emergency Budget would affect the business.

“We want to see the effects of the Budget in the coming couple of quarters,” he said.

“It will have an effect with VAT and some of the other Budget consequences, so we are cautious that consumer confidence and spending will be influenced by that. Since the Budget is so close, we can’t see any effects at the moment, but we will certainly see the effects coming through in the next three quarters.”

Shares in M&S fell 1.5 per cent or 5.3p to 347.4p in early trading on Wednesday.

Sir Stuart Rose, M&S executive chairman, said he anticipated that investors would approve the group’s executive pay report at its annual meeting next week, in spite of a recent recommendation to vote against the report by Pirc, the corporate governance advisory group.

“I can’t predict what they’re going to vote, but I have confidence that all our resolutions will be passed adequately,” he said.

M&S is giving Mr Bolland, former chief executive of supermarkets group Wm Morrison, a £15m ‘golden hello’, which Pirc has described as “excessive”. News of Mr Bolland’s pay package was followed in March of this year with another upsurge of investor anger over Sir Stuart’s future salary, which will be £875,000 in July of this year when he becomes non-executive chairman.