A gleeful City has rewarded M&S after it surprised investors with double-digit growth in food volumes over the first half of 2026.The retailer’s share price rocketed 9.5% after Wednesday morning’s results, and reached a decade-high price of 452p on Thursday.
Food sales rose 13.9% to hit £5.2bn in the six months to 26 September, as M&S’s strategy to grab basket share and become a full ‘shopping list’ retailer paid off with 11.9% volume growth.
Central to investors’ joy, however, was that M&S achieved that growth with a comparatively strong adjusted operating profit margin of 5.6% – despite significant investments in price.
“We have momentum as the UK’s fastest-growing grocer,” said the group’s CEO Stuart Machin.
“One-and-a-half million more customers are shopping with us and our continued focus on quality, innovation and value is appealing to more families, as we become more of a shopping list retailer. Investment in new stores, technology and a modern supply chain are getting us ahead for future growth, and our plan to double the size of the Food business is on track.”
Bernstein’s Richard Trainor said M&S was “even stronger” than previously thought and the results strengthened his conviction in the turnaround.
“Share gains are broadening into the everyday categories required to make M&S a genuine ‘shopping list retailer’, while larger baskets and the performance of new stores suggest plenty of runway remains.”
However, Machin warned M&S’ clothing arm was still in the “foothills” of a recovery plan.
The division’s revenue growth of 17.5% has given investors hope the success in food can be replicated across the wider business, despite profit margins falling below expectations.
A “heavily promotional” environment, hot weather and availability issues slowed clothing sales across the market, according to RBC analyst Richard Chamberlain.
“Performance is expected to improve in H2 as availability has recovered, with more cost savings expected to come through. It’s likely the market has seen some recovery in October.”
Overall pre-tax profits came in slightly ahead of market expectations of £399m despite the drag from clothing, which Trainor said underlined the “extraordinary strength of the food business”.
EToro analyst Mark Crouch said: “With Christmas approaching, a stronger balance sheet and the growing food business give management considerable momentum.
“Investors have already rewarded the turnaround enthusiastically, but restoring clothing profitability could give M&S’s remarkable revival considerably further to run.”
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