Analysis from market researcher NielsenIQ found M&S enjoyed a 9.4 percent rise in sales in the final 12 weeks of 2021. The firm previously upgraded its earnings outlook in November after it revealed it had beaten profit forecasts for the first half of the year. In a sign of the strength of its turnaround analysts are now predicting profit outlook for this year could be revised up once again when M&S publishes its third-quarter trading update on Thursday. M&S has been undergoing a programme of change since the launch of its ‘Never the Same Again’ strategy in 2020.
Key elements of this have included its tie-up with Ocado and stocking other clothing brands both online and in select stores.
The store’s share price is up over 1.5 percent today and has nearly doubled on this time last year.
AJ Bell Investment Director Russ Mould said: “Food sales are doing incredibly well, particularly instore.
“It has really nailed the proposition with decent quality products and an ever-widening range of items.
“Quality is the key word as it caters for a specific type of customer who is happy to pay that bit extra for something nice.
“Its online joint venture with Ocado has also helped the business reach a broader audience, such as individuals who want higher quality products but don’t want the faff of visiting a store.”
In a sign of a shift in the markets, shoppers increasingly abandoned the big four supermarkets in the run-up to Christmas.
Although maintaining a high market share, Tesco saw sales decline 0.1 percent.
This still outperformed Morrisons though, which saw sales fall 5.6 percent, followed by Sainsbury’s down 4.2 percent and Asda down 3.1 percent.
While M&S sales have grown considerably, shoppers are also starting to flock to discounters Aldi and Lidl.
Yesterday Aldi reported its best-ever Christmas with sales up 8.1 percent in December compared to 2019.
It also stated its commitment to providing shoppers with the lowest grocery prices in 2022.
Today though Lidl has sought to challenge this with Lidl GB CEO Christian Hartnagel describing the store as “The destination for the lowest grocery prices in the market”.
Lidl reported sales rising 2.6 percent year on year and says it achieved £21m in switching gains as people moved from other grocers.
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In particular, it highlighted the success of its Christmas jumper sales as the fastest-selling product from its Middle of Lidl aisle.
The discounter now describes itself as the fastest-growing bricks and mortar retailer.
Both Lidl and Aldi refer to expectations for rising inflation in 2022 during their promises to maintain low prices and it is thought a squeeze on the cost of living could help drive more shoppers towards the stores.
Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Retail faces significant headwinds in 2022, as consumer spending is held back by rising inflation, increasing energy bills, and April’s National Insurance hike.
“It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs.”