Marks & Spencer womenswear drives forecast-beating Christmas commerce

Marks & Spencer Group gross sales beat lofty expectations over the important thing Christmas buying and selling interval as groceries and womenswear drove a surge in demand.

The retailer’s like-for-like gross sales soared 8.1 per cent within the 13 weeks to 30 December, as meals gross sales development smashed forecasts at 9.9 per cent, and meals and residential revenues jumped 4.8 per cent – properly forward of expectations of two.8 per cent. 

Boss Stuart Machin mentioned M&S had led the market with quantity development of round 7 per cent in every month of the quarter, serving ‘extra clients than ever earlier than’, whereas womenswear was the ‘standout, rising quantity and worth considerably forward of the market’.

Festive advert: Actress Hannah Waddingham starred within the controversial M&S Christmas advert 

The  140-year-old group, which confronted criticism from some quarters over this 12 months’s Christmas advert, acknowledged extra staffing and enterprise charges prices over the interval however advised traders it could meet forecasts for the 12 months.

Forecasts see M&S set to publish full-year income of £705million, versus £482million within the earlier 12 months. 

The group mentioned: ‘As we enter the brand new 12 months and FY25, expectations for financial development stay unsure, with client and geopolitical dangers. 

‘We additionally face extra price will increase from greater than anticipated wage and enterprise charges associated price inflation. 

‘Nevertheless, the sturdy Christmas buying and selling efficiency gives confidence that the outcomes for the 12 months will likely be per market expectations.’

Machin added: ‘We enter 2024 with a spring in our step, however clear eyed on the near-term challenges. 

‘We are decided to ship our goal of driving 1 per cent development in market share in each companies and to up the tempo of our transformation.

Sales: Marks & Spencer Group gross sales beat lofty expectations over the important thing Christmas buying and selling interval

‘Our imaginative and prescient is to be essentially the most trusted retailer, doing the best factor for our clients, with high quality merchandise on the coronary heart of all the things we do, and we’re simply at the start of what we are able to obtain. Lots carried out, tons to do, plenty of alternative forward.’

The High Street stalwart has been on a roll since chief govt Machin and chairman Archie Norman led a restoration that has seen its share worth greater than double up to now 12 months, which propelled M&S again into the FTSE 100 after a four-year absence. 

Charlie Huggins, supervisor of the Quality Shares Portfolio at Wealth Club, mentioned: ‘The Clothing and Home division has been an issue youngster for M&S for a few years. 

‘The new technique, launched final 12 months, goals to enhance model notion and designs, cut back discounting and enhance the net providing, whereas taking a knife to prices and instilling a extra entrepreneurial tradition. Early indicators are this plan is resonating with customers.

‘While the UK client backdrop stays unsure, there are extra optimistic indicators than this time final 12 months, with rate of interest cuts prone to relieve some stress. Combine this with M&S’ self-help initiatives and execution that continues to impress, it suggests current buying and selling momentum may very well be sustained.’

Unpublished knowledge from retail specialists Kantar seen by the Mail on Sunday confirmed that grocery gross sales at market-leader M&S leapt by 14.2 per cent within the essential 4 weeks to Christmas Eve in contrast with the identical interval the earlier 12 months.

The worst performer, nevertheless, was M&S three way partnership associate Ocado, the place gross sales grew by a mere 0.5 per cent.

Ocado gross sales weren’t included in the latest M&S replace.  

Archie Norman, the M&S chairman, has mentioned he’s ‘not glad’ with the three way partnership’s efficiency and mentioned there was ‘work to do’ to enhance the loss-making partnership. The deal, struck in 2019 and price as a lot as £750million, changed a earlier tie-up between Ocado and Waitrose. M&S reportedly added practically 600 merchandise to Ocado’s web site earlier than Christmas.

M&S is one among many excessive avenue corporations reporting Christmas buying and selling figures this week, with Tesco additionally reporting on Thursday. 

Sainsbury’s loved a 7.4 per cent rise in like-for-like gross sales in the course of the festive quarter, with promotions boosting the grocery store’s backside line, whereas B&M revealed plans to pay a particular dividend after sturdy Christmas commerce. 

Last week Next revealed sturdy festive figures, whereas JD Sports was pressured to trim its revenue expectations in an surprising flip.

It comes as conventional grocers combat to defend market share from German discounters Aldi and Lidl, which have grown their UK market share from 4 and three.1 per cent, respectively, to 9.3 and seven.7 per cent respectively in simply ten years.

But grocers’ enter prices are lastly easing after two years of rampant inflation squeezing margins and driving grocery payments greater.

Grocery costs have been up 6.7 per cent year-on-year in December, the bottom stage since April 2022 and down from a peak of 17.1 per cent in February.