Retail giant looking to move on from cyber attack that cost it £136m
Marks & Spencer has released a more stable Christmas trading update than anticipated, offering some festive relief for investors after a year marred by an expensive cyber attack and months of disrupted online sales. The retailer reported group sales of £5bn for the 13 weeks to 27 December, up 3.3% excluding Ocado Retail, with food once again performing strongly.
This performance signifies a crucial moment for M&S as it aims to move past the April cyber incident that disrupted online orders for nearly two months and shook confidence in what had been one of the high street’s most successful turnarounds. Food sales increased by 6.6 %, with like-for-like growth of 5.6% and UK volumes up 2.3%, enabling M&S to achieve a record 4% grocery market share.
The retailer says it is now the UK’s fastest-growing grocer for families, benefiting from investment in value lines and core staples as shoppers remained price-conscious over Christmas. Chief executive Stuart Machin expressed confidence as he attempted to shift the narrative away from last year’s disruption, as reported by City AM.
“A record number of customers shopped M&S this Christmas,” he said. “From the festive food shop, to picking up party outfits and gifts, millions more trusted M&S to deliver the family Christmas.”
The retail behemoth’s shares climbed 3.26 per cent following the trading statement, now changing hands at 339.20 pence, as the City applauded indications that festive trading helped ease concerns over the cyber incident’s impact.
The outlook proved more patchy in Fashion, Home & Beauty, where revenues dropped 2.5% and like-for-like sales declined 2.9%.
M&S attributed this to diminished footfall in stores and the “long tail” of stock disruption stemming from the cyber breach earlier in the year, which continued to hamper performance, despite online sales bouncing back.
Machin suggested the division was “getting back on track”, highlighting strengthening digital performance and a more substantial Christmas Sale than usual that is already making room for fresh seasonal stock.
“We planned a bigger sale this year, with strong sell-through already making way for our new season lines,” he noted.
The announcement arrives as M&S continues to digest the financial consequences of the cyber attack, which the retailer now anticipates will cost £136m by 2026, partly cushioned by £100m in insurance payouts.
The breach slashed profits by half during the first six months of the year and necessitated an extended shutdown of online and click-and-collect operations, a painful setback for a business that had been experiencing a welcome resurgence prior to the attack. International sales edged up 0.9%, whilst Ocado Retail, now integrated into M&S’s figures, posted sales growth of 13.7%, with M&S products representing approximately 30% of Ocado’s overall sales.
Looking forward, the group maintained its unchanged full-year guidance and announced it would speed up its “reshaping” strategy into 2026, despite fragile consumer confidence and a challenging retail environment.
“Today, we are regaining momentum,” Machin said. “Our ambitions are undimmed, and our determination to knuckle down and deliver is stronger than ever.”
