Retailer Marks and Spencer has upgraded its annual profit outlook thanks to robust sales in its food as well as clothing and home businesses owing to improved customer perception due to its rejuvenated stores and updated ranges.
The retailer reported over 11 per cent growth in like-for-like food sales and an over 6 per cent increase in like-for-like clothing & home sales for the 19 weeks to 12 August, despite wetter weather in July dampening summer retail sales in the UK.
Calling M&S the high street success story of 2023, Joe Dawson, Retail Analyst at GlobalData, states that a slowdown in inflation and the promise of warmer weather boosted sales of M&S’ holiday range between April and June, while its collaborations and campaigns around Women’s World Cup have also shown favourable result.
“The retailer will also have benefitted from the popularity of the Women’s World Cup, having collaborated with England’s Senior Women’s team to produce a range of tailored pieces that have been worn by the Lionesses throughout the tournament.
“Another football adjacent programme has been the retailer’s Eat Well Play Well campaign, featuring members of the UK’s national football teams as well as prominent figures in the community promoting healthier lifestyles and urging shoppers to “follow the flower” in reference to M&S’ healthy food branding.
“While healthy eating may have taken a backseat to low prices as a priority for some consumers during the cost-of-living crisis, it is still an important and relevant topic for many, especially M&S’ typically more affluent customer base. This, combined with the expansion of the Remarksable value range will have been the backbone of strong food sales as consumers continue to opt for the retailer’s reputed quality and value for money.
“It is important to note however that the 11 per cent growth in like-for-like food sales was up against a relatively weak comparative, 3.4 per cent in Q1 2022-23 and a warning of the uncertainties surrounding the economic outlook show M&S’ cautiously optimistic view of the coming year. Strong growth during the Christmas period in FY2022-23 will make for tougher comparatives in the latter stages of FY2023-24.
“Despite halted plans for the revamp of the flagship Marble Arch store, M&S’ plans for store rejuvenation will continue, with a £13 million investment in the North East that will see an transformations and new openings. Across the UK, M&S’ new store renewal programme will cost £480 million and expects to open 20 new stores this year.”