Marks & Spencer has reported a pre-tax profit of £355m for the six months to the end of September, a sharp recovery from £3m in the same period last year, when a cyber attack paralysed its website and left store shelves bare. The FTSE 100 retailer credited its food division with spearheading the return to growth despite what it described as an "onslaught of cost headwinds" facing the industry.
Food division drives recovery
The group, one of Britain's most recognisable retailers, has leaned on its expanding food business to drive its recovery from the cyber incident, which wiped more than £100m from its profits in April last year. M&S Food is attracting 1.5 million more customers than this time last year, fuelling 12 per cent volume growth. The grocer has sought to win over younger shoppers with novelty products, such as strawberries and cream sandwiches, and social media content.
Overall sales growth across the group's food division reached 13.9 per cent during the six-month period, rising to £5.2bn, as the retailer pushes to grow its market share by one per cent by 2028. M&S Food aims to establish itself as a "shopping-list retailer" by luring British households away from competitors and positioning itself as the go-to destination for their weekly grocery shop.
Fashion and home recovery
Marks & Spencer's fashion and home divisions have taken longer to recover from the cyber attack. Chief executive Stuart Machin told shareholders that this area of the business has "bounced back" but "fell short of [its] potential". Fashion, home and beauty sales climbed 17.5 per cent to £2bn, measured against weaker comparatives from the previous year, after the cyber incident prevented customers from placing online orders for several weeks and disrupted stock deliveries to stores.
"Despite strong brand health indicators for quality, value and style and further market share growth, sales and profit remained below two years ago as the business did not maximise conversion of demand for sales," the group told investors. Demand for M&S fashion and home products is increasingly shifting online, the retailer confirmed, with in-store sales falling by five per cent compared to two years ago, while online sales surged by 11 per cent over the same period.
Store expansion and outlook
The retail giant has pursued larger and improved stores to win over consumers. The average shop floor size has doubled over the past five years, with 17 stores opened, refurbished or extended in the last six months alone. The retailer expressed optimism that its flagship outlets can continue to attract substantial footfall, highlighting its recently revamped Pantheon site on Oxford Street. Since the store's reopening, its fashion, home and beauty floors have recorded a 27 per cent surge in sales compared to two years prior.
Machin said: "Four years ago, we set out a very clear strategy to protect the magic of M&S while modernising the rest and we are making good progress. As we look forward to Christmas, we are laser-focused on delivering both our trading and transformation plans."
