M&S Food Hall

Increased volumes and associated stock-flow challenges led to ‘slightly higher seasonal markdown as we reset for the new year’, M&S said

Marks & Spencer has reported market-leading store-based grocery sales growth in the Christmas ‘golden quarter’, with more customers doing their full shop with the retailer.

Food sales were up 8.7% to £2.6bn in the 13 weeks to 28 December, and 8.9% up on a like for like basis.

Food volume growth of 6.6% from the first half was sustained into the Christmas trading period, driven by increased customers and transactions, making M&S the top performing store-based grocery retailer in volume and value growth over the period, based on Kantar data.

New and renewed stores exceeded expectations, according to M&S, while supply chain investment supported improved availability.

However, increased volumes and associated stock-flow challenges led to “slightly higher seasonal markdown as we reset for the new year”, the retailer said.

It said food sales growth continued to be driven by investment in quality and value, with 500 new lines launched in the period.

Core categories, such as meat, produce, grocery and in-store bakery grew by double-digits as customers chose M&S for more of their everyday shopping, according to the trading update.

M&S said there was also a strong performance from innovation and quality upgrades in areas such as Gastropub, as customers chose the retailer as an affordable restaurant-quality alternative to eating out.

Sales of its ‘Remarksable’ value range grew 14%.

Clothing and Home sales were up 1% in the period to £1.3bn, and 1.9% up on a like for like basis. Total UK & Ireland sales rose 5.9% to £3.9bn, climbing 6.4% like-for-like.

“This was another good Christmas for M&S, building on a strong performance in the prior year,” said M&S CEO Stuart Machin. “We sustained trading momentum with like-for-like sales up 8.9% for Food and 1.9% for Clothing, Home & Beauty.

“Sales records were broken across the business, with Food recording its biggest day and Clothing, Home & Beauty online its biggest week, but we’re not complacent - as a growth business it’s our job to break records.

“In Food, our focus on quality, innovation and trusted value translated into strong sales and market share growth, with M&S the top performing store-based grocery retailer over the period. Five hundred new lines were launched, and sales of new Christmas products grew 14%. Core category sales grew strongly as more customers ticked off their whole shopping list at M&S.

“There were a few growing pains as we delivered our biggest ever volumes, particularly in smaller stores, reaffirming the opportunity to accelerate transformation of the Food supply chain and go even faster on store renewal and rotation.”

International sales were down 2.8% to £178m, while total group sales rose by 5.6% to £4bn.

Read more: City snapshot: Supermarket Christmas sales rally on heavy promotions

Machin said: “In Clothing, Home & Beauty our focus on style, quality and value saw us grow sales and take market share in a declining market, with womenswear and menswear performing well. M&S partywear sales were up on last year but it was our heartland categories of denim and knitwear that outperformed. Although Home & Beauty grew, the development of these categories is nascent, and they remain areas of opportunity.

“Online grew strongly and new and renewed stores continued to outperform expectations, but store sales overall were down 1.5% in part due to weather. The opportunity for Clothing, Home & Beauty in 2025 is to continue offering customers the best style, quality and value, but marry that with a focus on turning stock faster, further reducing options and optimising store range and space.

Read more: City snapshot: Record Christmas for supermarkets but Asda continues to struggle

“As in Food, these opportunities simply make us more resolute to go faster on our plans to modernise the supply chain and utilise digital and technology to maximise our online potential.”

He added: “The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control. At M&S, we stay close to our customers and their needs, and with that in mind our investment in trusted value, along with great quality, style and innovation remains our priority.

“Transforming M&S is a marathon, not a sprint, and we go into 2025 shifting up a gear and raring to go as we accelerate the scale and pace of change.”

Shore Capital analyst Clive Black said the performance was ‘a little better than our expectations’ and maintained full-year 2025 profit before tax guidance at £830m.

“With M&S speaking of being a ‘growth business’, there appears to be a good few miles in the M&S investment thesis yet,” Black said.

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