In the financial year 2008, the Marks and Spencer Company along with other retailers in the market saw dramatic drops in their sale levels. The recessionary pressures in the economy and the crashing of the housing and mortgage market and the financial market forced the consumers in the market to tighten their purse strings. As a result the level of consumer spending in the economy decreased for the year. However the major impact of this was felt on the retailers who saw their sales drop dramatically, even in the Christmas and holiday season (Barbaro, 2008) which is the peak season for retailers like Marks and Spencer.
However despite the reduction in the sales, the sales from online operations of retailer have considerably increased. Even in the holiday season food based sales for Marks and Spencer suffered minimal loss and decrease while in the following months, the online sales for the company depicted an upward trend with significant increase in sales (Finch, 2009). The overall sales in the last quarter of 2008 saw a small growth in the overall sales; however the sale through the online channel (M&S Online) was highly significant. “Marks & Spencer (M&S) announced its fourth quarter trading statement for 2008/2009 this morning. Group sales were up by 1.9 per cent and its growing online business reported an increase in sales of 20 per cent” (‘Marks & Spencer online sales rise in better than expected results’, 2009). The trend of the increasing the sales and high performance of the M&S Online was also depicted in 2009 as well. “M&S Direct had another strong quarter with online sales up 28%” (‘Press Release: Q1 Trading Statement’, 2009).
Generally there is a trend for shifting retail operations to the internet for retailers like Marks and Spencer as the online e-tail operations provide much better sales revenues and performance figures than the physical stores. Statistics pertaining to online shopping have depicted that John Lewis has seen its online sales increase by 60 percent during the holiday season, while Tesco saw an increase of 30n percent, with Next having an increase in overall sales of 93 percent of which half were due to online sales (Elosegui, 2007).