Trading Statement

Marks & Spencer Group PLC
14 April 2004


Issued: Wednesday, 14th April 2004

                QUARTER 4 TRADING STATEMENT AND UPDATE - 2003/04

Preliminary Results and Group Profit before Tax
The Preliminary Results will be announced on Tuesday, 25th May. Group profit
before tax and exceptional items for the 52 weeks is expected to be in line with
consensus market expectations, with strong control of costs off-setting
disappointing fourth quarter sales.

The Statutory Accounts will report a 53-week year to 3rd April.

UK Trading
The full year results will incorporate sales for the 53 weeks ended 3rd April.
However, for comparative purposes, 52-week performance is noted in the table
below. UK sales (including VAT) for the 11-week period to 27th March 2003 and
the 52-week full-year period to the same date were:

                      11 weeks to                    52 weeks to
                      27th March                     27th March
                    % on Last Year                 % on Last Year

             Actual        Like-for-like       Actual    Like-for-like
Clothing      -2.5                              -0.5
Home         -13.7                              -4.6
            _______           _______        ________      _______
General       -3.9              -5.2            -1.0         -1.8
Food          +4.3              -1.4            +5.7         +1.6
            _______           _______        ________      _______
Total         -0.1              -3.4            +1.8*        -0.4
            _______           _______        ________      _______

(*excluding VAT, total sales were approximately 1.9%)

International:
Full year turnover in the overseas businesses, including franchises, increased
by approximately 2% at constant exchange rates.

Commenting on the statement, Roger Holmes, Chief Executive, said:
'Sales this quarter are clearly not good enough. We are taking action on a
number of fronts to accelerate the transformation of the business and deliver
improved performance. These include delivering greater consistency in the appeal
of our Womenswear, more inspirational stores and sharpened execution. At the
same time, we are driving improvements in the way we work across stores, Head
Office and the supply chain.

Clothing
'Underlying clothing sales for the quarter were down 1.0%, after adjusting for a
Chargecard discount day in the comparatives last year. The following action has
been taken:

   •Strengthened management team: Vittorio Radice (General Merchandise) and
    Mark McKeon (Retail Director) took up their appointments last week. We have
    also strengthened the Womenswear buying teams, including key roles in
    smartwear, knitwear and casualwear

   •Sharper prices: We have lowered prices on some of our key Womenswear
    products as well as introducing more entry level price merchandise within
    our ranges. Average selling prices for Spring/Summer for women's clothing
    are down c.3.5% for full price merchandise

   •Improved choice: We are increasing our clothing choice to customers in
    our High Street stores following the success of trials in Banbury and
    Windsor. Here we increased the product choice by 35%, particularly in
    Womenswear, without increasing overall stocks on display. We are
    accelerating this roll-out to more stores throughout the Spring/Summer,
    covering 90 stores by the Autumn

   •Clearer segmentation: We will deliver stronger and clearer segmentation
    in Womenswear this Autumn, incorporating the launch in May of per una due,
    to make our Womenswear salesfloors more exciting and easier to shop

   •Inspirational shops: Building on the success of Windsor as well as the
    recently opened store in Speke (Liverpool), we are continuing to develop a
    more attractive and inspirational shopping environment for our customers,
    including our product and service proposition. The next phase of this
    programme will be demonstrated in at least 10 further stores in 2004/05,
    encompassing six new stores and the re-modelling of certain existing shops,
    including Basingstoke which opens in the Autumn

Home
'Sales continue to be affected by the on-going repositioning of our offer, as we
seek to broaden our appeal to more customers. We opened the first pilot Marks &
Spencer Lifestore in February. We are delighted with the interest it has
generated, but it is early days and we look forward to the opening of the second
store, in Kingston, during the Summer.



Food
'In an increasingly competitive food sector we have maintained our market share,
with the Simply Food and Food stores making our product more accessible to more
customers. However, our like-for-like sales this quarter, again impacted by
inconsistent execution across a number of key categories and events, are
disappointing. We are taking a number of actions to improve on this performance,
including:

   •Developing more distinctive new products across all areas, particularly
    for special events
   •Better highlighting the unique qualities of our Food through more
    effective advertising
   •Clearer promotional programme and better price communication
   •Improving availability, particularly in our smaller stores

This will complement our food footage strategy. We now have 74 Simply Food and
Food stores and remain on track to add 500,000 square feet of new food space by
2005/06. This new space continues to perform in line with our expectations.

Money
'The &more card was successfully launched last Autumn and we now have 2.1
million accounts (2.7 million card-holders), compared to 1.7 million accounts in
December. 1.5 million of our customers were issued a total of £10 million worth
of Reward vouchers during the quarter and half of these have already been
spent.'

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Guidance for 2004/05

   •The planned opening of new footage, plus the annualisation of footage
    opened in 2003/04, will add c2% sales contribution to clothing and c5% to
    food, on a weighted average basis.

   •We anticipate further improvements in the clothing bought-in margin of
    approximately 75 basis points. We remain on track to deliver a total of 300
    basis point improvement to the clothing bought-in margin in the 3 years to
    2005/06.

   •UK retailing operating costs, including logistics, but excluding any
    accrual for performance related bonuses, will increase by 5%. The investment
    in new footage, including the annualisation of costs associated with footage
    opened in 2003/04, will account for over 4% of this increase.

   •If performance proves to be in line with business plans agreed by the
    Board, a bonus provision will be made. Guidance, reporting the impact on
    operating costs, will be given at the appropriate time.

   •The P&L costs of the Head Office move to Paddington Basin will be c.£10
    million, compared to approximately c.£16 million incurred this year. These
    costs will be treated as exceptional.

   •The Head Office restructuring programme, recently announced, will incur
    termination costs that will be treated as exceptional. We anticipate
    providing for the cost relating to the first phase of approximately 500
    roles in 2003/04. The cost is currently being evaluated and will be
    disclosed at the time of the Preliminary Results. The cost relating to the
    second phase of the programme will be provided for in 2004/05 and further
    guidance will be given in due course.

   •The impact of the continued development of the &more credit and loyalty
    card business will be to reduce Marks & Spencer Financial Services profits
    by c.£40 million for the financial year 2004/05, compared to the £60 million
    reduction in 2003/04.

   •The effective tax rate is estimated to be c.31%, compared to a rate for
    2003/04 of c.30%. This year's expected tax rate is lower than guidance given
    at the time of our Interim Results in November, largely due to a reduction
    in depreciation relating to non-qualifying capital expenditure following a
    recent analysis of actual expenditure.

   •FRS 17 (Retirement Benefits) will be adopted at this year-end (2003/04),
    as previously announced. Whilst the FRS 17 charge for 2004/05 is still being
    finalised, for the UK defined benefit scheme we anticipate the charge to
    EBIT to be broadly similar to 2003/04 (at c.£120 million). We estimate a net
    charge to interest relating to FRS 17 in 2004/05 of c.£10 million, taking
    into account the funding cost of the £400 million public issue.

   •Group capital expenditure for 2004/05 will be c.£400 million.


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Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences and
prospects are 'forward-looking statements' within the meaning of the United
States federal securities laws. These forward-looking statements reflect Marks &
Spencer's current expectations concerning future events and actual results may
differ materially from current expectations or historical results. Any such
forward-looking statements are subject to various risks and uncertainties, 'risk
factors', inherent in the business, including: changes in political and economic
conditions, financial and equity markets, or legislation and regulation;
increased competitive influences (e.g. price), changes to sector formations
(e.g. consolidation or fragmentation) or a downturn in the retail or financial
services sectors; inaccurate predictions of our customer lifestyle preferences
and failure to interpret them in the products and services we offer; changes in
the level of customer footfall or spending habits; occurrence of product related
failure or contamination; effectiveness of our brand awareness and marketing
programmes to promote relevance to our current and potential customers; adverse
impact on our supply chain, stores or business operations as a result of acts of
war, terrorism or natural catastrophe; dependency on a major supplier of
merchandise or support services; and disruption to information systems or IT
infrastructure. This list should not be considered an exhaustive statement of
all potential risks and uncertainties.
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For further information, please contact:

Media enquiries:
Marks & Spencer Corporate Press Office:    020 7268 1919

Photography:
Photography available from:
www.newscast.co.uk
or
www.marksandspencer.com/mediacentre

Analyst enquiries:
Tony Quinlan, Investor Relations           [phone]
Damian Evans, Investor Relations           [phone]
Alison Reed, CFO                           [phone]

Investor & Analyst Conference Call
This will be hosted by Roger Holmes, CEO and Alison Reed, CFO at 08.15 (BST) on
Wednesday 14 April.
Dial in number: [phone]
Password: Q4 Trading

A recording of this call will be available until midnight (BST) on Monday 19
April.
Dial: [phone]
Pin Code: 240592



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