M&S has reported a significant increase in profits driven by robust food sales and strategic innovations.
- For the first half of 2024, M&S’s profit before tax climbed by 17.2%, reaching £407.8 million.
- The company’s food segment experienced an 8.1% increase in sales, with operational profit slightly rising by 0.5%.
- M&S attributes this growth to improvements in produce, meat, and dairy offerings and a strong value perception from customers.
- Looking forward, M&S is optimistic about continued progress despite ongoing inflation, anticipating strong sales during the holiday season.
In a remarkable turn of events, M&S has announced a notable rise in profit margins for the first half of the year. The retail giant’s profit before tax saw a substantial increase of 17.2%, totaling £407.8 million. This impressive growth is largely attributed to the robust performance of its food division, where sales soared by 8.1%. Adjusted operating profit in this segment also edged up by 0.5%, indicating a steady yet impactful rise.
The upmarket retailer has strategically driven this growth through a focus on food innovation, particularly within its produce, meat, and dairy categories. Customers have perceived a significant increase in the value of these items, marking the strongest value perception the company has experienced in over a decade. This strategic move has not only enhanced M&S’s financial standing but also solidified its reputation as a trusted retailer.
According to Stuart Machin, M&S’s chief executive, the company’s strategy of ‘Reshaping M&S for Growth’ has successfully increased customer base, sales value and volume, market share, and returns across both food and clothing sectors. Both divisions have achieved market share growth consistently for the past four years.
M&S’s efforts to remain competitive have led to the revision of 1,000 existing products and the introduction of 1,400 new lines throughout the year. This extensive overhaul has placed the company ahead in terms of quality credentials, distinguishing it further in the marketplace. Moreover, M&S has effectively employed a ‘price lock’ strategy on essential items, including fish, dairy, and poultry, alongside seasonal fresh market specials. This tactic has boosted the sales of core products significantly, proving beneficial in driving larger sales volumes.
Looking ahead, M&S remains confident about sustaining its growth trajectory despite the challenges posed by elevated cost inflation. The company anticipates a robust performance during the festive period, with Machin heralding the upcoming Christmas food range as the best he has seen during his tenure at M&S. The stylish seasonal clothing offering is also expected to attract customers eager to celebrate the holiday season with M&S.
M&S remains optimistic about its ability to sustain growth throughout the rest of the year, driven by strategic improvements and a focus on value perception.
