M&S Food reported a 10.1% increase in food sales and growth in its grocery market share as the retail group delivered a “strong all-round performance” with both sales and profits soaring.
The high street retailer reported pre-tax profits of £522.9 million, up from £403.1m in the pre-Covid period. Sales came in at £10.8 billion, an increase of almost 7% for the financial year ending March 2022.
M&S claimed the high performance of its food and grocery category was due to its “record quality and improved value perception”. The string sales growth was supported by a substantial programme of product innovation, with over 1,350 new food and drink lines launching over the past year.
As a result, the retailer has seen its grocery market share grow from 3.4% to 3.6% over the past three years.
In a climate of increasing price awareness, “Remarksable Value” and “Fresh Market Special” ranges have been relaunched, offering ‘M&S quality” at everyday low prices. Around one in four M&S baskets now include one of these lines.
M&S also launched a partnership with Costa Coffee in the second half of the year, making available 30 M&S food-on-the-move products in 2,500 coffee shops. Early sales are in line with the retailers’ expectations.
Sales at its Ocado joint venture saw a normalisation of basket sizes and the shape of trade, resulting in a 4% decline in revenue as shoppers returned to buying groceries in stores.
M&S chief executive Steve Rowe – who is stepping down from the business today after leading a transformation plan for the past six years – said the results showed that M&S has “fundamentally changed”.
“While there is much more to do, the business has moved beyond proving its relevance and has the opportunity for substantial future growth,” he added.
Rowe will be succeeded by Stuart Machin and Katie Bickerstaffe taking over as co-chief executives.
Commenting on M&S’ full-year results, Hargreaves equity analyst Laury Hoy added: “Unlike some of its discount peers, Marks’ position as a premium food brand could serve it well through this period of inflation.
“The group’s shored up its value proposition and that should continue to attract higher-income shoppers.”
The news comes as M&S said it will fully exit Russia at a cost of £31million.