Marks and Spencer boss Stuart Machin has criticised Labour's latest Budget as "a whole lot of nothing", saying the Government has orchestrated "one of the biggest tax grabs in history" as the retailer faces an "onslaught" of cost headwinds.
Speaking after the retailer revealed its half-year results, Machin said the company had been hit by a punishing series of cost increases following three Labour Budgets. He said: "You can't ignore the onslaught of all the headwinds. It's probably more challenging than we've ever seen in the past in trying to balance the books. But we do want to make sure we're constantly getting costs out and reinvesting in value."
Budget Impact on Business Costs
Chancellor John Healey unveiled his first Budget last week, promising support for millions of households and tax support for many high street firms to protect British workers and businesses from the economic impact of the Iran war. However, M&S said its business costs have been pushed higher due to policies from the Budget.
Machin said: "Even the headlines on business rates sounded positive, but it actually adds another £10million to our business rates bill. If you look at the last three budgets, I can't think of another time like it. It's one of the biggest tax grabs in history that I have seen."
Financial Results and Cost Pressures
On Wednesday, the company revealed that adjusted pre-tax profits rose to £403.2million for the 26 weeks to September 26, compared with £184.1million a year earlier. However, this was lower than the same period in 2024, amid an impact from weaker fashion, home and beauty profits and higher costs.
M&S said it has swallowed around £35 million of costs from increases to packaging taxes, pay and National Insurance costs, and costs linked to disruption in the Middle East.
Operational Challenges and Sales Performance
Last year, the retailer had to halt all online sales on its website for around six weeks and suffered empty shelves due to disruption to its logistics systems after hackers targeted the business around the Easter weekend. Bosses said recent sales and profits from its fashion, home and beauty business were still impacted by disruption to product availability due to the "long-tail impact" of the cyber incident. Store sales were also partly hurt by the prolonged hot weather over the summer.
Despite this, the high street giant has been buoyed by strong growth across its food business, which is performing "ahead" of plan.
Machin said: "Despite the onslaught of cost headwinds, we have remained focused on our ambitions, and we are clear on our plan. We enter the second half in a strong position, with a solid performance in October under our belts."
M&S saw sales lift by 16.2% to £9.25billion for the half-year to September. Its food operation reported a 13.9% jump in sales, as it benefited from an 11.9% rise in volume sales as well as store openings and investments. Meanwhile, fashion, home and beauty sales increased by 17.5% year-on-year, supported by the online recovery following the cyber attack.
