UK retailer Marks and Spencer today (22 May) hailed the “strong” performance of its food business, which posted higher sales and margins in a year when company-wide profits fell.
The company reported a 0.2% fall in underlying pre-tax profit to GBP705.9m (US$1.11bn) for the 12 months to the end of March. On a reported basis, pre-tax profits were down 15.7% at GBP658m.
Go deeper with GlobalData
Sales were up 2% at GBP9.9bn. Revenue from its UK stores increased 1.5% to GBP8.9bn. However, it was M&S’s food business that boosted its UK turnover. Food sales increased 3.9% on the back of a 2.1% rise in like-for-like sales. Sales from the retailer’s general merchandise arm fell.
The company said its food retail arm had “performed strongly in a tough market” in the year to the end of March. Sales were up 3.9% to GBP4.7bn on the back of a 2.1% increase in like-for-like sales.
M&S cited a “focus on freshness, speciality and convenience” and said it “continued to lead the way with high-quality, first-to-market food products”.
See Also:
Gross margins from the retailer’s food business increased by 50 basis points to 31.4% thanks to “better management of promotions and waste” and the early introduction of new systems. Both factors helped offset increased commodity prices, M&S said. Its UK business as a whole saw gross margins fall 30 basis points.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataLooking ahead, M&S said it would “develop space selectively, particularly [our] Simply Food stores, which have been a very successful format”.
However, it said it expected to spend GBP200m less on its UK retail estate in the next two years. The retailer said its space would increase by 3% in the coming year and 2.5% in the next 12 months.
Nevertheless, M&S said it planned to open 100 overseas stores a year. International sales increased by 5.8% in the retailer’s last financial year.
Shares in M&S were up 1.04% at 341.7p at 09:26 BST.
Click here for the full statement and check back later for coverage of the retailer’s press conference in the City.
