Marks & Spencer saw blockbuster Christmas trade including best EVER day for food sales

Marks & Spencer looks to be the big retail winner of Christmas 2024 after the group’s sales soared ahead of market expectations.

The retailer posted sales of almost £4.1billion for the 13 weeks to 28 December on Thursday, driven by blockbuster food demand, as M&S continued to build market share.

Food sales rocketed 8.9 per cent on a like-for-like basis, beating expectations of 7.8 per cent growth and making M&S the top performing store-based grocery retailer in terms of volume and value over the period.

Clothing, home and beauty sales jumped 1 per cent, surpassing forecasts of 0.7 per cent growth and defying a 1.5 per cent decline in non-food sales suffered by the wider retail market over the fourth quarter.

While the retailer’s food division saw its best ever day over the period, non-food sales enjoyed a record trading week online.

Year-on-year growth of 6.4 per cent across the UK and Ireland offset a decline overseas, which M&S pinned on ‘continued challenging market conditions in India and the phasing of franchise shipments’.

It said ‘reset actions are underway’ and the group is ‘confident in the growth opportunity’ internationally over the medium term.

M&S has continued to surpass analyst forecasts as its revival under boss Stuart Machin, who has make a number of big strategic moves, such as the reorganisation of around 1,500 stores and the launch of the group’s food hall offering.

The group has also ramped up investment in quality and innovation.

Industry data published earlier in the week also suggests the retailer’s joint venture with Ocado is starting to pay dividends.

Machin said: ‘This was another good Christmas for M&S, building on a strong performance in the prior year.

‘Transforming M&S is a marathon, not a sprint, and we go into 2025 shifting up a gear and raring to go as we accelerate the scale and pace of change.’

Tax rises spell uncertain future

Looking ahead, M&S flagged economic uncertainty in terms of growth, inflation and the direction of interest rates, as well as ‘well-documented increases in taxation’.

M&S faces £120 million a year in additional taxes and costs in the wake of the Autumn Budget’s increases to employer national insurance contributions and the minimum wage.

Machin added: ‘The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control.

‘At M&S, we stay close to our customers and their needs, and with that in mind our investment in trusted value, along with great quality, style and innovation remains our priority.’

Marks & Spencer shares sank 5.4 per cent to 356.5p in early trading, bringing 12 month gains to around 24 per cent.

Richard Hunter, head of investment at Interactive Investor, said: ‘The company anticipates a tougher year ahead, as customers potentially retrench in light of higher for longer interest rates and the possibility of higher goods prices following the measures announced in the Budget.

‘However, for the time being M&S is strongly back in fashion with investors and customers alike.

‘Further tweaks to its store rotation programme, more investment into smaller ranges such as Home and Beauty, while targeting an improvement to its online offering and a reset of its international business are all signs of a business which will not be resting on its laurels.’

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