Tesco and Marks & Spencer have been named Christmas winners after reporting stronger-than-expected sales, driven by online growth and festive demand. Tesco upgraded its annual profit forecast by £50 million to £2.75 billion, citing a better-than-anticipated trading performance over the festive period.
UK sales at Tesco rose 6.8% in the four weeks to Christmas, while overall group sales, including wholesale business Booker and international stores, increased by 6%. Chief executive Ken Murphy said the chain invested in service with more staff on the shop floor, leading to “market-leading availability” and its best Christmas yet. Sales of the premium Finest range grew nearly 17%, while online orders jumped 11.5%.
Marks & Spencer reported a 10% rise in food sales at established stores in the 13 weeks to 30 December, as more customers opted for full weekly shops after price cuts on basics. The Remarksable value range saw an 18% sales increase. In clothing and home, M&S achieved its highest market share in a decade, with like-for-like sales up 4.8%. Chief executive Stuart Machin noted the company held off on early discounts, which paid off with strong full-price sales later in the season.
Both retailers flagged potential inflationary pressures from Red Sea shipping disruptions, which could affect delivery times and costs. Tesco’s Murphy said the issues might lead to higher prices if attacks continue, while M&S warned of possible delays to clothing and alcohol deliveries in February and March. However, both expressed cautious optimism for 2024, with M&S expecting no price increases this year as inflationary pressures ease.
