A few of Marks and Spencer’s (M&S) digital propositions have been rising over the previous 12 months, the retailer has claimed in its full-year report overlaying April 2022 to April 2023.
M&S mentioned its click on and accumulate service had grown, alongside a rise in lively customers of its cell app and Sparks loyalty programme.
However its revenue earlier than tax noticed a 7.8% drop 12 months on 12 months (YoY), from £522.9m in April 2022 to £482m in April 2023, which the retailer put down primarily to ongoing transformation.
M&S CEO Stuart Machin mentioned: “Gross sales have been up in-store and on-line, supported by development in click on and accumulate gross sales, lively app customers and Sparks loyalty membership, demonstrating the rising energy of our omni-channel mannequin.
“The shop rotation and renewal programme delivered robust gross sales uplifts and can speed up this 12 months, together with the opening of 5 brand-defining full-line shops in main cities. Our disciplined strategy to capital allocation means we are able to make investments for development, whereas additional lowering internet debt and sustaining funding grade credit score metrics, and we plan to renew dividend funds at our interim outcomes.”
Revenue could also be down for the retailer, however gross sales are up 12 months on 12 months each on-line and offline – retailer gross sales have been up 14.9% 12 months on 12 months and on-line gross sales have been up 4.8%.
Up to now, M&S has had a repute for high quality meals over anything, however previously 12 months, its clothes and residential gross sales have carried out properly, growing by 11.5% 12 months on 12 months.
However the Ocado Retail arm of the enterprise noticed a drop in income within the interval, with M&S claiming this a part of the enterprise is present process a “reset” to enhance buyer expertise and working prices.
Gross sales for Ocado Retail have been down by 1.2% 12 months on 12 months, regardless of a rise in lively prospects. M&S put this right down to folks purchasing much less continuously now the pandemic has subsided, although a standard pattern within the present financial local weather is decreased retail volumes and elevated retail spend on account of the rising value of dwelling.
M&S talked about having undergone “plenty of years of considerable change and funding” to work on creating plenty of elements of its enterprise, together with its omni-channel proposition, partly achieved by way of its partnership with Ocado.
In 2019, M&S and Ocado entered a deal by which M&S took a 50% share of Ocado’s UK retail enterprise with entry to the Ocado Good Platform. It went on to provide prospects entry to M&S-branded items when ordering on-line from Ocado.
However this isn’t the one enterprise M&S has undertaken to extend effectivity and cut back prices over time.
Final 12 months, M&S introduced the acquisition of Gist to assist modernise and reduce the price of operating its provide chain. It additionally claimed to have labored to “streamline” its digital, know-how and help centre capabilities.
Whereas it additionally plans to make investments over the subsequent 12 months in initiatives corresponding to an order planning system for clothes and residential merchandise, and a forecasting and ordering system for meals merchandise, the retailer mentioned the prices of those investments could be offset in different areas.
“One 12 months in, our technique to reshape M&S for development has pushed sustained buying and selling momentum, with each companies persevering with to develop gross sales and market share,” mentioned Machin. “The advantages of the Gist acquisition and operational efficiencies additionally supported an improved efficiency within the second half [of the year].”