M&S has been credited with achieving “stellar growth” in food in the golden quarter, though it has gone “back to the old days” of leaning on the division for growth.
Food like-for-like sales were up 5.6% year on year in the 13 weeks to 27 December, according to a trading update from the retailer this morning. Total food sales were up 6.6%, though UK volume growth was softer, at 2.3%.
M&S also achieved a record high grocery market share of 4%, according to Worlpanel data, and was the fastest-growing grocer for families, who have been the number one target of the food business’s transformation strategy in recent years.
However, fashion, home & beauty sales were down 2.5%, and 2.9% on a like-for-like basis, as the impact of the cyberattack on the retailer last April continued. The division held a bigger than anticipated sale to clear through stock, after the attack disabled clothing & home online sales from April until June.
It left group sales growth excluding Ocado Retail at 3.3%.
Peel Hunt said the food division was “flying high” with “stellar growth” but in non-food “stores remained under a cloud and the sale was larger than management had hoped”.
AJ Bell head of markets Dan Coatsworth said: “M&S has gone back to the old days where strong food sales helped to offset a weak showing from its clothing business.
“Last year’s cyberattack derailed the business, leaving gaps on its store shelves and stopping online sales for many months. During that period, rivals including Next seized the opportunity to lure in M&S’s clothing customers.”
Coatsworth added: “It’s lucky that M&S can lean on its food arm. People often spend a little bit more at Christmas and they know what they’re getting with M&S food – good quality at a higher price point, but not an exorbitant one.”
Shore Capital’s Clive Black was more forgiving, calling it “a solid sales performance in the circumstances”. “If the firm meets and beats our unchanged FY27 expectations, then its equity is grossly under-rated and the stock undervalued,” he said.
M&S was also the fastest-growing traditional store-based grocer over the 12 weeks to 28 December, according to Worldpanel data released earlier this week, with its sales up 7.2% year on year.
Announcing its Christmas trading update, M&S CEO Stuart Machin said: “Food sales were strong and the business continues to outperform, hitting a new market share milestone in the period. We are the UK’s fastest-growing grocer for families, reflecting our investment in value and core family staples, and demonstrating progress in our journey to become a shopping list retailer.
“Fashion, home & beauty is getting back on track as we work through the tail end of recovery. Sales overall were slightly down but online performance continued to improve as digital sales recovered. We planned a bigger sale this year, with strong sell-through already making way for our new season lines.
“We enter this new calendar year full of ambition and laser-focused on our plan to reshape M&S for further growth. In food, we have even more first to market innovation coming and further investment in quality and price. And in fashion, our new season ranges are resonating well with customers as we double down on value, quality and style.”
M&S’s share price was up 3.3% this morning.
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