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Marks鈥檚 summer chill

• Robert Peston
• 10 Jul 07, 07:00 AM

Here are two big questions begged by trading statement.

Is the store group's remarkable recovery under its chief executive Stuart Rose juddering to a halt?

And have the recent rises in interest rates simply taken the edge off excessive retail-spending growth or is the UK heading for a painful consumer slowdown?

The economic climate is particularly hard to read right now. Why?

Well, the not-so-glorious summer weather has dampened sales of seasonal kit.

Also - maybe - a bit of terrorist-induced unease around the place is making many of us a little more reluctant to spend spend spend.

But such inclement conditions afflict all retailers.

What matters for M&S's owners is whether it is doing better or worse than its rivals.

The latest figures from the indicate that Marks is no longer trouncing the competition - though the nuances of who's up or down are lost in the aggregates.

What is clear is that growth in Marks's sales per unit of space, known as like-for-like sales, has been falling for more than a year.

Like-for-like sales growth was 8.2 per cent in the first three months of last year.

And in the succeeding quarters, growth fell to 6.2 per cent, then to 5.6 per cent, then 3.8 per cent and now around 2 per cent.

That is a trend.

What's more, growth was weaker at the end of the current quarter than at the beginning - so the decline is continuing.

Which is not to say that Stuart Rose's rebuilding of M&S will crumble, just like the two previous management teams' attempts to rehabilitate this most totemic of retailers.

He has reinforced the group's foundations, say analysts, in a way that his immediate predecessors failed to do.

Even if sales were actually to fall in absolute terms, Rose would probably still be a hero in the City, so long as the sales drop were greater at Next, or Debenhams, or New Look, or BHS.

But retailing is a cruel and unforgiving business. His habitual bonhomie will be tested if competitors start to make up lost ground.

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