The boss of Marks & Spencer has branded last week's Budget “a whole lot of nothing”, even as the retailer announced that profits more than doubled to over £400 million in the past six months.
Stuart Machin, who had made a series of demands of Chancellor John Healey in advance, said he was disappointed there were no measures to relieve pressure on retailers. His criticism came despite the strong profit performance.
Budget criticism and rates relief
Mr Machin said: “I think the Budget overall was a whole lot of nothing. Even the headline freeze on business rates, it was actually an extra £10million on top of £170m we already pay.”
He added: “When you look at the last three budgets, you can’t ignore the fact that this is probably one of the biggest tax grabs in history that I have seen.”
Welcome for UK-EU food exports deal
Mr Machin did welcome the UK and EU's draft deal on removing post-Brexit checks from food and agriculture exports ahead of the UK-EU summit later this month.
“If we can get that over the line that will be a positive,” he said. “It will be a positive for us because we have stores in the Republic of Ireland and Northern Ireland and it is very problematic getting stock to our stores.”
He described an easier route without the burden of so much paperwork and admin as “quite a big win”, adding it meant £10m of extra costs.
Profit figures and cyber attack legacy
Profits at M&S jumped to £403.2m in the six months to late September, compared with £184m a year earlier. The figure was still below the £413m it made for the same period before a devastating cyber attack last year.
It comes as spy chiefs warned the UK to be on alert after hackers managed to take control of fridges and freezers at supermarkets across Europe, cranking up temperatures and leading to millions of pounds worth of wasted food. Mr Machin confirmed that M&S had not been affected in the latest incident, but added: “It is something that you can never say never. Cyber is top of our mind.”
M&S's sales rose 16.2% to £9.25billion for the half-year to September, with takings in food up almost 14%. Meanwhile, fashion, home and beauty sales increased by 17.5% year-on-year as online recovered following the cyber attack.
However, Mr Machin admitted it missed out on sales by having to manually order some products - a legacy of the cyber incident - making duff buying decisions, and not ordering enough of other core products that were in hot demand. Lingerie continued to be a standout for M&S, with 11 million bras sold in the six months and a 50% market share, alongside 32 million pairs of knickers.
