After some tough years, Marks & Spencer is on the road to recovery. The British chain of department stores is selling more clothes again, but is also focusing on affordable food products.
M&S regains its place in the market
Marks & Spencer increased its turnover by 9.6 % in the financial year ending 1 April, amounting to almost 12 billion pounds (14 billion euros). Underlying pre-tax profit also rose by 21 % to 476 million pounds (550 million euros). Strong sales of jeans, office wear and affordable food products particularly boosted Marks & Spencer’s profits, The Guardian reports.
Since Gap and Topshop disappeared from British high streets, M&S has been able to increase its share in the denim market. The chain has also made a conscious decision to compromise on margins in favour of lower prices. Clearly this was what consumers were looking for, as sales of M&S’s low-cost food range (Remarksable) increased by 40 %.
2023 will be a difficult year
Yet inflation has hit the company harder than ever before, CEO Stuart Machin said. He predicts a difficult 2023, in which sales will rise only modestly and profits may even fall by some ten million pounds. The chain expects to spend an extra 100 million pounds on wages and 50 million on energy. In addition, it may have to cut margins further to retain customers.
Online grocery service Ocado also suffered a setback last year, with turnover falling 1.2 % to 2.22 billion pounds (2.5 billion euros). Rising costs pushed losses up to 59 million pounds as well. For its stake in the company, M&S recorded a loss of 29.5 million pounds. Last year Marks & Spencer closed six department stores and two outlet shops; this year a further ten shops are being closed and a further ten relocated.