Marks & Spencer saw an impressive surge in sales, despite customer finances taking a hit, though profits declined in the past year due to rising costs.
The British retailer noted that both its clothing and home ware, and food divisions experienced an increase in sales compared to the year before. Plus, it was evident that shoppers returned to the high street after the Covid-19 pandemic, which contributed to the 11.5% growth in clothing and home sales to £3.72 billion. Food sales, on the other hand, rose 8.7% to £7.22 billion.
M&S CEO Stuart Machin reported that the company had a “good start” to the current financial year, yet the outlook for consumer spending remains uncertain. Moreover, the firm’s pre-tax profits and adjusting items fell to £482 million, which was still above analyst forecasts. The decrease in profit was partly caused by the lack of business rates relief from the government. In addition, both the clothing and food divisions experienced cost inflation.
To counterbalance the growing costs, M&S plans to implement a cost-cutting programme to save £150 million annually. Machin commented: “Our Food and Clothing & Home businesses invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do, as serving our customers well is the only route to delivering for our shareholders.”
