by Trevor Sturgess

Marks & Spencer has posted its first rise in quarterly group sales for two years but warned that conditions will be challenging in the year ahead.

M&S, which has stores across the county, maintained the recent upward trend by big high street names like John Lewis and Next.

Sales over the 13-week Christmas period went up by 2.6 per cent, with food up 1.3 per cent, clothing up four per cent and online sales rising strongly by 32 per cent.

On Tuesday John Lewis reported that sales in the five weeks to January 2 rose 15.8 per cent, with sales at the Bluewater store up 22 per cent. Next disclosed sales up 1.6 per cent.

Sir Stuart Rose, chairman, said: “We had a good Christmas, continuing the improvements seen throughout 2009.
“In Food, we had our biggest ever Christmas fortnight, with record one day sales of over £50m on 23 December.

“In General Merchandise, sales of knitwear, sleepwear and footwear were particularly strong. Over Christmas, customers bought more than 36 million mince pies, a million bottles of champagne and over eight million jumpers and cardigans.

But Sir Stuart warned that trading conditions over the coming year would remain challenging as a result of continuing economic uncertainty.

And Richard Curr, head of dealing at Prime CFDs, was more cautious. He said M&S third quarter sales over the key Christmas period were below expectations.

“Even though M&S delivered an increase in underlying sales for the first time in two years, the rest of the update was no better than a mixed picture with a challenging outlook. The recent sharp gains for M&S shares have already factored in the best of the good news.”

Charlie Menegatos, senior trader at Accendo Markets, said the trading update would be viewed in a positive light.

He said: “We believe there will be a collective sigh of relief after this all-important trading update from M&S. Although the sales rise in UK stores open for at least a year was below analyst expectations, the cross company performance including food and online sales was reassuringly solid.”

Next reported an annual 4.6 percent rise in retail total sales, excluding value added tax, in the 22 weeks ended December 24.

Richard Curr, head of dealing at Prime CFDs, said sales by the “evergreen” retailer were better than expected.

Meanwhile, shop prices rose by 2.2 per cent in December, according to the British Retail Consortium - Nielsen Index. The cost of food went up 3.7 per cent, whilst non-food inflation advanced 1.4 per cent.