M&S faces a significant financial challenge due to recent National Insurance changes.
- The retailer plans to absorb this cost without increasing prices for customers.
- CEO Stuart Machin emphasizes maintaining the company’s strong value perception.
- M&S’s profit has increased significantly, bolstered by market share growth in clothing and food.
- The company aims to manage financial pressures with strategic cost-reductions.
M&S is confronted with a substantial financial hurdle as it seeks ways to manage an additional £60 million in National Insurance costs. The changes introduced in the recent Budget have increased both the rate and lowered the threshold for payments, presenting a “double whammy” according to CEO Stuart Machin.
The company’s approach to this challenge is to seek out cost-saving measures instead of transferring the burden onto consumers through higher prices. Machin stressed the importance of maintaining the company’s “value credentials,” and expressed confidence in their ability to absorb these financial pressures effectively.
Despite anticipating some impact from the National Insurance changes, the unexpected severity of the increase has necessitated a swift strategic response from M&S. “We don’t want to pass on these costs to our customers. We want to maintain where we are,” Machin stated, highlighting the company’s commitment to its customer base.
In recent months, M&S has seen its profits rise by more than 17% to £407.8 million before tax and adjustments, for the first half ending on September 28. This was primarily driven by consecutive years of market share growth in both clothing and food sectors.
By focusing on identifying further cost reductions, M&S aims to offset these additional financial pressures, preserving its “best value perception…in a decade” without compromising the quality and affordability its customers expect.
M&S is committed to managing National Insurance cost increases through strategic cost-saving measures while safeguarding its value reputation.
