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Marks and Spencers has seen its profit-before-tax fall by 23.7% to £205.5m in the second half of the year.
Nonetheless, it revealed that its food offering “outperformed” both in value and volume in the UK as its sales grew 5.6% in its half year results ended 1 October 2022.
It is reported that a reduction in the retailer’s gross margin of 110bps reflects “continued investment in quality and price”, though the brand did not pass through the full effect of inflation due to an 11% increase in its cost of goods.
According to the group’s results, Ocado experienced a retail loss of £0.7m, compared to its previous profit of £28.1m in FY21, as demand from consumers weaned.
However, the group reportedly experienced a 14% increase in sales within the clothing and home selection, with store sales increasing by 18.8% and online sales increasing by 4.9%.
Stuart Machin, chief executive of M&S, said: ““Trading in the first half has been robust with both businesses growing ahead of the market, reflecting the beginnings of a reshaped M&S. In Food, investment in trusted value has driven top-line growth but short-term profit has been reduced, although the acquisition of Gist gives us control of one of our biggest cost and efficiency levers.
“Clothing has delivered a stand-out performance from a market leading position in value with improving style credentials. The programme to renew and rotate our store estate is driving sales and quick paybacks, while the M&S App now accounts for over a third of online Clothing & Home sales.”
He added: “At Ocado Retail, the customer proposition is being re-energised under new leadership. Underpinning our business is an improved balance sheet with reduced debt and a strong cash position. This progress means we face current market headwinds with an increased resilience and level of confidence. Looking beyond the current stormy weather, much is in our control and our mandate is clear – to step up the pace, accelerate change, drive a simpler, leaner business and invest in growth opportunities to build a reshaped M&S.”
