Marks & Spencer set to report strong sales as turnaround continues

Marks & Spencer is set to update investors on the next stage of its turnaround as it heads into the busy Christmas period.
Analysts expect the group to report a strong first half as it continues to make progress and win market share. Current consensus forecasts estimate that M&S will report first-half sales of £6.6 billion, an increase of 7 per cent from the same period last year.
The retailer’s food sales are expected to drive growth, with the division forecast to report a first-half revenue increase of 7.6 per cent, according to consensus estimates. Clothing and home sales are expected to grow by 3.4 per cent.
Under Stuart Machin, chief executive since 2022, and Katie Bickerstaffe, its former co-chief executive, M&S has been undergoing a dramatic transformation despite a challenging trading environment for retailers.
The group’s share price has climbed 70 per cent since the beginning of the year, to an eight-year high, in a vote of confidence from investors in its growth strategy.
The food division has gone from strength to strength this year, with recent data from NielsenIQ showing that a third of households in the UK bought its food and drink products in the 12 weeks to October.
Investments in store refittings have also benefited the group as it continues to develop its pipeline of grocery stores and reduce the number of stores with surplus space. Investors will be watching out for new information about the progress of the cost-savings programmes, which include its supply chain restructuring as well as new store openings.
It comes as independent clothing retailers face a challenging “golden quarter” this year, with surging shipping fees and continuing supply chain disruptions threatening their peak season profits.
Small and mid-sized e-commerce companies are especially vulnerable to rising costs as major carriers reintroduce peak season surcharges and Red Sea shipping disruption persists, according to the E-commerce Peak Season Benchmark Report 2024 from Mintsoft.
The report from the order fulfilment software provider, which draws on data from retailers across the UK, highlights many obstacles affecting retailers’ profits as they prepare for Black Friday on November 29.
Nearly a third (32 per cent) of companies in the supply chain sector reported higher carrier fees in November last year compared with October, while a quarter experienced a sharp 25 per cent rise in shipping costs during Black Friday week.
Average shipping costs per item rose from £3.50 to £4.37. With carriers such as FedEx and UPS implementing surcharges of up to $8.25 per package, independent retailers must either absorb these fees or pass them on to customers, many of whom expect low-cost or free shipping.
Beth Chapman, managing director of Starlinks Global, a cross-border delivery service, criticised the surcharge practice.
She said: “The bad behaviour of profiteering from some carriers during peak season is frustrating. Retailers are struggling with price pressures, and we should be working together to grow volume sustainably — not hiking prices as soon as October hits.”
Mintsoft’s research indicates that retailers also face labour shortages, with over 90 per cent hiring temporary staff to manage peak demand but nearly a fifth (18 per cent) struggling to fill these positions.
Effective inventory management is another significant challenge. Last year 58 per cent of companies experienced a stockout and 45 per cent reported longer dispatch times.