Following today’s release of M&S’s figures for Q3, FY2021/22; Pippa Stephens, retail analyst at GlobalData, a leading data and analytics company, offers her view: “M&S continues to reap the rewards of its transformation strategy, having successfully rebounded past pre-pandemic levels in Q3 FY2021/22, with group revenue rising by 8.6% to £3.3bn on a two-year basis, meaning that it is now more confident in its ability to deliver the increased full year profit guidance announced in November 2021 of £500m. While its success was primarily driven by its outperformance in food, online investments, including a substantial rollout of instore fulfilment, will have also significantly aided its success. Despite having been a laggard in the digital space prior to the pandemic, clothing & home online revenue grew by an impressive 50.8% on a two-year comparative to £361m in Q3 FY2021/22.
“In food, the retailer experienced its largest ever Christmas revenue, with its increased focus on the value of its own-brand products helping it to become more favourable for consumers doing their weekly shops. The division saw sales rise by 12.4% on a two-year comparative to £1.9bn during Q3 FY2021/22, outperforming two of its key grocery rivals, Sainsbury’s and Tesco, which reported growth of 6.6% and 7.9%, respectively, on a two-year basis across similar reporting periods. While Ocado figures are not being included within M&S’ reported revenue, it revealed that its products represented c.30% of baskets in December.
“While clothing & home has formerly been M&S’ main handicap, it has now seemingly turned a corner in its overhaul, with sales beating pre-COVID-19 levels by 3.2% at £1.1bn. As well as revamping its own-brand clothing ranges to be trendier and more inspiring, the incorporation of popular third-party brands like Nobody’s Child and Ghost has also helped it acquire new customers. These more appealing ranges will have allowed M&S to significantly reduce the proportion of products being discounted, driving full-price revenue to grow by 45% on a two-year basis in Q3 FY2021/22. At the end of December, the retailer announced that its activewear line Goodmove had become its largest own-brand, launching its new spring/summer range alongside an eye-catching marketing campaign.”