LONDON (Reuters) - Bellwether retailer Marks & Spencer posted a small rise in underlying Christmas sales as discounts helped to lure cash-strapped shoppers, and said it expected trading conditions to stay challenging.
Britain's biggest clothing retailer, which also sells homewares and upmarket foods, said Tuesday it was making additional cost savings to offset a fall in profit margins due to the discounting.
Sales at British stores open over a year rose 0.5 percent excluding VAT sales tax in the 13 weeks to December 31, its financial third quarter.
That included a 1.8 percent fall in general merchandise sales and a 3 percent rise in food sales, against forecasts for a fall of 1.5 percent and a rise of 1.5 percent respectively.
In its second quarter, Marks & Spencer (M&S) reported a 0.7 percent fall in underlying British sales.
Britain's retailers are mostly struggling as disposable incomes are squeezed by rising prices, muted wages growth and austerity measures, and as shoppers worry about a weak housing market, rising unemployment and the euro zone debt crisis.

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