M&S reports food sales up 2.6% on previous year

Marks & Spencer has today reported its Christmas trading figures showing food like-for-like (LFL) sales increased by 2.6%, with LFL ex-hospitality up 5.7%.

On a comparative basis this performance was even stronger given reduced food-on-the-move sales and lower footfall in town and city centres.

During the four-week lead up to Christmas, customers responded to the group's innovative seasonal product, and LFL sales ex-hospitality and franchise grew by 8.7% with large retail park and Simply Food stores significantly outperforming.

Operating changes including the Vangarde supply chain programme and investment in store technology resulted in stronger service and reduced waste. On top of this Ocado Retail further sustained its recent positive performance with the participation of M&S products remaining strong.

International revenue decreased 10.4% impacted by changing restrictions across the globe. Targeted actions helped to support the doubling of online sales and in the firm's owned markets trading trends improved. Near-term franchise performance continues to be impacted by the changes in partner stock requirements as a result of the pandemic.

The free trade agreement with the EU means M&S will not incur tariffs on its core UK sales. However, potential tariffs on part of its range exported to the EU, together with very complex administrative processes, will significantly impact its businesses in Ireland, the Czech Republic and franchise business in France, which it is actively working to mitigate.

The announcement of an effective UK wide lockdown, potentially enduring until Easter will impact store sales and we are continuing to actively manage our Clothing & Home stock and our store cost base accordingly.

CEO Steve Rowe said, “Given the on-off restrictions and distortions in demand patterns our trading was robust over the Christmas period. More importantly beneath the Covid clouds we saw a very strong performance from the Food business including Ocado Retail and a further acceleration of Clothing & Home online.

'I want to thank all my colleagues for a first-class execution of Christmas for our customers in near impossible conditions.

'Near term trading remains very challenging but we are continuing to accelerate change under our Never the Same Again programme to ensure the business emerges from the pandemic in very different shape.”