Marks & Spencer boosted by food growth amid ‘onslaught of costs’

Marks & Spencer (M&S) has seen a resurgence in its food sector, driving overall growth for the retailer despite facing numerous cost pressures, according to the FTSE 100 company's latest financial report. In the six months leading up to the end of September, M&S reported a pre-tax profit of £355m, a significant increase from the £3m profit recorded last year when a cyber attack crippled its operations.

The company's chief executive, Stuart Machin, emphasized that the strong financial footing built over the past few years has enabled M&S to invest confidently in future opportunities. Despite the ongoing financial challenges, M&S Food has attracted 1.5m more customers than this time last year, contributing to a 12% volume growth.

The grocer aims to win over younger shoppers with innovative products and engaging social media content. Overall, sales for M&S Food rose by 13.9% to reach £5.2bn in the six-month period, with the company targeting a 1% increase in market share by 2028. To achieve this goal, M&S Food is positioning itself as a 'shopping-list retailer,' aiming to become the go-to destination for the weekly shopping needs of British households.

The company has been expanding its store footprint by opening, refurbishing, or expanding 17 stores in the last six months, doubling the size of its average shop floor over the last five years. However, fashion and home department sales have lagged behind due to the lingering effects of the cyber attack, which prevented customers from placing online orders and slowed down stock deliveries.

While M&S Fashion and Home sales grew by 17.5% to £2bn, falling short of their potential due to the inability to fully capitalize on demand. The decline in store sales is attributed to a 5% drop compared to two years ago, while online sales surged by 11% during the same period. Despite the challenges, M&S remains optimistic, noting a 27% increase in sales at its flagship stores in Oxford Street since its recent renovation.

Machin reaffirmed the company's strategy of modernizing while preserving the essence of M&S, stating that they are making significant progress towards Christmas. The retailer is focused on delivering on both its trading and transformation plans for the upcoming holiday season.