Marks & Spencer's stock price has risen dramatically over the last week, despite the company expecting declining earnings in 2022/23. This optimism is due in large part to the successful revitalisation of M&S Food.
Its food segment had an 8.7 percent increase in sales, including a 5 percent increase in "core categories" that allowed it to surpass its pre-pandemic sales levels.
In reality, its market share rose by 3.6% in the 52 weeks ending in the middle of March, making it the leader among all major grocery chains, as reported by statistics from Kantar Worldpanel. At one point last week, share prices were up by 13%.
The struggling retailer's remarkable recovery has been propelled by its Food department.
“One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with continued growth in sales and market share,” CEO Stuart Machin said in a statement.
According to Machin, M&S has led the recovery in Food by prioritising quality and value. Customer perception has risen to its highest levels since 2017. With the aid of the Gist purchase, M&S was able to cut prices rather than "passing on the cost of inflation" to customers.
Clearly a hint to competing with deep discounters like Aldi and Lidl, it featured its Remarksable lines and locked-in pricing on family favourites. Because of this, the number of customers that added Remarksable items to their carts increased by 40%.
However, fresh food was a major factor, seeing spikes in demand during holidays like Christmas, Easter, and Mother's Day.
Over the following five years, M&S anticipates an additional 1% increase in Food sales.
Machin says this will be delivered by fixing the backbone processes of the supply chain and driving growth in the store estate and that one of the keys to unlocking the potential in the next years will be through innovative thinking.
Despite the good news, M&S is still not back to where it was when it was a retail juggernaut less than a decade ago. This year's profits are anticipated to decline once again.
"The epidemic and the present economic crisis haven't helped," says the business, however, things are beginning to look better.