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Marks and Spencer’s Christmas trading saw progress amid its turnaround strategy, with food sales outperforming the wider market despite fragile consumer confidence.Underlying food sales rose 6.6% in its third quarter of trading, with like-for-like sales up 5.6% and UK volumes increasing 2.3%.
The retailer said it has now outperformed the food market in both value and volume for more than three years, with market share reaching 4.0% in November, its highest level to date.
It added that the sell-through of key Christmas lines led to higher sales and lower markdowns and waste compared with the previous year.
Overall sales growth was driven by core grocery categories, supported by product innovation and quality upgrades, including Italian ready meals, in-store bakery and deli ranges.
Nonetheless, fashion, home and beauty sales fell by 2.5% year-on-year, with like-for-like sales down 2.9%. The retailer said growth in online sales was offset by a decline in store sales, reflecting reduced high street footfall and the ongoing impact on stock management following the cyber attack incident last year.
Despite the decline, the business said it regained market share leadership in the category during the period as new season ranges performed well, while new stores, including Bristol Cabot Circus, exceeded expectations as part of the group’s store rotation strategy.
Elsewhere, international sales increased 0.9%, supported by new wholesale agreements, online growth and food franchise performance. This offset weaker fashion, home and beauty shipments and performance in India.
At Ocado Retail, sales rose 13.7%, driven by volume growth of 10.7% and order growth of 11.0%. Sales of Marks and Spencer products on Ocado.com increased 16.3% and accounted for about 30% of total Ocado Retail sales during the period.
Looking ahead, the group said its full-year guidance remains unchanged, as it plans to “accelerate the reshaping strategy against the context of an uncertain consumer environment”.
CEO Stuart Machin said: “A record number of customers shopped M&S this Christmas. From the festive food shop, to picking up party outfits and gifts, millions more trusted M&S to deliver the family Christmas.
“Food sales were strong and the business continues to outperform, hitting a new market share milestone in the period. We are the UK’s fastest growing grocer for families, reflecting our investment in value and core family staples, and demonstrating progress in our journey to become a shopping list retailer.”
He added: “Fashion, Home and Beauty is getting back on track as we work through the tail end of recovery. Sales overall were slightly down but online performance continued to improve as digital sales recovered. We planned a bigger Sale this year, with strong sell-through already making way for our new season lines.
“We enter this new calendar year full of ambition and laser focused on our plan to reshape M&S for further growth. In Food, we have even more first to market innovation coming and further investment in quality and price. And in Fashion, our new season ranges are resonating well with customers as we double down on value, quality and style.”
