Marks & Spencer saw record Christmas food sales

Marks and Spencer Group has raised its profit forecast slightly after record Christmas food sales as customers stock up on sweets despite fears omicron could dampen demand.

The British clothing and food retailer, which has already raised its outlook twice, expects profit to at least match its previous forecast of around £500m (€598m) in during this exercise. The chain said its clothing and home division, a long-standing issue for the group, also performed well with a second consecutive quarter of growth.

International sales, which include its Irish operations, amounted to £272 million (€325 million). M&S said this represented a 5.1% increase on the same period of 2019/20, just before the pandemic hit, with online sales more than doubling. This performance was “driven by growth in apparel and home in the Republic and in key markets like India following the easing of Covid-related restrictions.”

“In addition, we generated strong growth from online marketplaces and franchise shipments to the Middle East,” he said.

There was no mention of its Irish food sales, which were impacted last year by Brexit supply issues and empty shelves.

Turn around

M&S, a family brand with hundreds of stores across Britain and Ireland, has struggled for years with a business dominated by too many expensive stores and a clothing division often seen as old-fashioned.

The turnaround finally appears to be progressing and M&S said full-price apparel sales rose 45% while online sales in that division continued to be strong.

Food sales rose 12% as the spike in omicron cases encouraged more people to celebrate the holidays at home rather than in restaurants. M&S said it also benefits from its retail joint venture with online grocer Ocado Group.

Last week, fierce rival M&S Next raised its profit forecast for the fifth time after particularly strong sales of formal wear and evening dresses.

Marks and Spencer shares have gained nearly 90% in the past 12 months. -Bloomberg