Marks & Spencer saw a successful Christmas trading, including the best day ever for food sales

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

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

Food sales rose 8.9 percent on a like-for-like basis, exceeding expectations of 7.8 percent growth and making M&S the best-performing supermarket chain in terms of volume and value over the period.

Sales of clothing, homewares and beauty products rose 1 percent, beating forecasts of 0.7 percent growth and defying a 1.5 percent decline in non-food sales that saw the broader retail market in fourth suffered from this quarter.

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

Year-on-year growth of 6.4 per cent in Britain and Ireland offset a decline abroad, which M&S put down to ‘continued challenging market conditions in India and the phasing of franchise deliveries’.

It said that ‘reset actions are underway’ and that the group is ‘confident in the international growth opportunities’ in the medium term.

M&S has continued to beat analyst forecasts during its revival under boss Stuart Machin, who has made a number of major strategic moves including the reorganization of around 1,500 stores and the launch of the group’s food hall offering.

The group has also increased investments in quality and innovation.

Industry data published earlier this week also shows the retailer’s joint venture with Ocado is starting to bear fruit.

Machin said: “This was another good Christmas for M&S, building on the strong performance of the previous year.

“Transforming M&S is a marathon, not a sprint, and as we enter 2025, we have stepped up a gear and are ready to go further as we accelerate the scale and pace of change.”

Tax increases portend an 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 tax increases’.

M&S is facing £120 million a year in additional taxes and costs as a result of the Autumn Budget increases to employers’ national insurance contributions and the minimum wage.

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

‘At M&S ​​we remain 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 fell 5.4 per cent to 356.5p in early trading, taking 12-month gains to around 24 per cent.

Richard Hunter, head of investments at Interactive Investor, said: ‘The company expects a tougher year ahead as customers may cut back in the face of higher interest rates and the possibility of higher goods prices as a result of the measures announced in the Budget .

‘But for now, M&S is back in strong fashion with both investors and customers.

‘Further adjustments to its store rotation programme, increased investment in smaller ranges such as Home and Beauty as it focuses on improving its online offering and a reset of its international operations are all signs of a company that will not rest on its laurels. ‘

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