Marks & Spencer and Tesco enjoy a strong Christmas | Mark & Spencer | Latest News Headlines
Marks & Spencer and Tesco enjoy a strong Christmas | Mark & Spencer
| News Today | News Today
Marks & Spencer and Tesco had a strong Christmas trading period as the rapid spread of Omicron prompted people to eat and drink more at home instead of going out to restaurants and pubs.
However, both retailers have warned of rising prices for buyers in the coming months as shipping and raw material costs rise and supply chain difficulties are expected to continue for a few months.
“We will continue to see bumps and bumps over the next quarter,” said Steve Rowe, managing director of M&S, who said some price hikes were inevitable later in the year. “The pressures have eased slightly as we passed the peak, but there are still issues of labor shortages and continued employment. [staff] absence [including at suppliers]. “
Tesco said cost inflation was around 5%, but it was working closely with suppliers to realize efficiencies so that all of this did not pass on to buyers.
Salary increases for workers in shops, warehouses and delivery networks are also expected to increase, as staff shortages caused by Brexit are compounded by absences linked to the pandemic.
Tesco and M&S have both said they will negotiate with the unions and expect to raise wages as rivals including Sainsbury’s, Aldi and Lidl have already pledged to pay more than £ 10 an hour starting this spring.
M&S, which is recovering from years of slump, recorded its highest ever food sales and a strong increase in clothing. Food sales jumped 10% in the three months to January 1, compared to the previous year, making it the fastest growing food retailer in the UK.
The retailer said strong sales of bras, pajamas, jeans and athletic wear boosted clothing sales while food sales were boosted by buying a wider range of clothing. everyday items including tea, easy-to-peel citrus fruits, milk and cheese. Demand for special items, including rosé prosecco, vegetarian and vegan foods, and a light box of shortbread cookies, also boosted trade.
“Customers are desperate for great quality merchandise and that’s one of the great things we offer. There is great value theft more than necessarily cheap prices, ”Rowe said.
The sharp increase in M&S wholesale sales came despite fears of product shortages caused by supply chain difficulties, including driver shortages and blockages at ports.
Clothing sales jumped almost 40% in the UK and more than 17% overseas as shoppers were able to return to stores after widespread closings last year.
Beyond the year-over-year rebound, M&S said clothing sales were up 3.2% from 2019 – before the pandemic – despite a 10% drop in sales in its stores , with online commerce being just over 50% ahead of two years ago. Food sales were up 12.4% from pre-pandemic levels, not including items sold through Ocado, the online specialty grocery service in which Marks & Spencer now has a 50% stake.
Rowe said, “Trading over the Christmas period has been strong, demonstrating the continuous improvements we have made in product and value.
“Food maintained its momentum, outperforming the market over 12 and 24 months. The market continues to be impacted by the headwinds and headwinds we reported in the first half of the year, but I remain encouraged that our transformation plan is now leading to improved performance. “
The boost to food retailers from the Omicron wave has also been confirmed by Tesco.
The UK’s largest supermarket said its sales rose 0.6% in the three months to Jan.8, compared to the same period a year earlier. Tesco increased sales in 2020 when supermarket sales were boosted by hospitality businesses shutting down for many weeks across the UK.
Sign up for the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Ken Murphy, CEO of Tesco, said: “Despite increasing cost pressures and supply chain challenges in the industry, we have continued to invest to protect uptime, have doubled our commitment to deliver a excellent value for money and offered our strongest party line ever.
“This has put us in a strong position to meet customer needs as, once again, Covid-19 has led to a greater focus on celebration at home. As a result, we outperformed the market, increasing our market share and strengthening our value position. “
Both companies raised their forecasts for the full year, but investors were disappointed. Disappointment over the lack of significant earnings gains and fears of inflation saw Tesco shares fall 2% early in trading while M&S was down 4%.
Latest News Headlines abc News Marks & Spencer and Tesco enjoy a strong Christmas | Mark & Spencer
