"Better than expected" H1 for M&S

Date : 05 November 2020

Laura Jacobson

Head of Insight - RA UK

At a time Steve Rowe believes it has become impossible to forecast with any degree of accuracy, M&S outperformed its previous COVID-19 scenario. The retailer's like-for-like food performance remains robust and this divsion's adjusted operating profit also improves. However, significant challenges remain for its clothing & home division, resulting in group revenue declining -15.8% and operating profit before adjusting items falling -77.1% for the 26 weeks ending 26th September 2020. 

Results in brief

  • Group revenue declined -15.8% to £4.1bn
  • Operating profit before adjusting items declined -77.1% to £61.8m
  • Clothing and home revenue declined -40.8%
  • Food revenue declined -0.3%
  • Food like-for-like grew 2.7%, and excluding hospitality was up 6.6%

Stark variance in performance by store location

Double digit like-for-like sales in Simply Food and retail park locations has been offset by significant drops in like-for-like in city centres (-29%), shopping centres (-13%), high street locations (-14%) and franchise travel locations (-75%). Collectively, these worst hit areas of trade account for 40% of M&S's food sales in the previous year.

Shift in basket composition

M&S continues to invest in and report improvement in value perception on shopping basket staples as it seeks to attract bigger, family shops. Fewer promotions and continuation of its ReMarksable value campaign are resonating with shoppers. This is going some way to offset a weaker performance in categories such as food-on-the-move, a key strength at M&S.

Business transformation continues

Key successes include:

  • Ocado switchover, and synergies of £15m for the current year are on track
  • Renewal stores performing well, with learnings implemented in more locations (eg Nottinghill, Nottingham Giltbrook, Maidstone)
  • Vangarde supply chain processes now rolled out to 159 stores and delivering good results
  • Substantial restructuring and store cost reduction
  • Relaunch of Sparks loyalty programme, grown to over 8m members


M&S states its plans preparing for EU exist are well advanced, preparing for administrative changes, investing in technology to support tracking goods and providing information, and working with suppliers on import compliance. The retailer has also created a single export centre in Motherwell to manage goods movement from Great Britain to the island of Ireland. However, it anticipates increased costs, which will likely affect retail pricing.

For Christmas, M&S has invested behind product lines that will provide flexible options for smaller gatherings, with strategies such as Book & Shop in place to ensure shoppers can visit stores with confidence.

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Retail Analysis subscribers: compare M&S's latest food performance with UK competitors in our results tracker.