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The impact of Covid in 2020/21 renders comparisons to the prior year less meaningful. To aid understanding, throughout this document we are showing the 26 weeks to 28 September 2019 as the comparative period for commentary and percentage changes.

Strong financial results

  • Profit before tax & adjusting items of £269.4m (2019/20, £176.3m) 
  • Profit before tax of £187.3m (2019/20, £158.8m; 2020/21, loss of £87.6m)
  • Food sales1 up 10.4%, sales ex hospitality and franchise2 up 16.9%
  • Food operating profit before adjusting items of £143.7m (2019/20, £92.2m)
  • C&H sales1 down 1%, full price sales1 up 17.3%
  • C&H online sales1 growth of 60.8%, now 34.4% of total C&H sales. Store sales down 17.6%
  • C&H operating profit before adjusting items of £156.2m (2019/20, £109.6m)
  • Net debt reduced to £3.15bn down 22.6% on 2019/20.

Underlying improvements in all main businesses

  • M&S Food growing market share with consistent strong quality and improved value perceptions
  • Ocado Retail opens 3 new CFCs. Planned capacity growth over 50% since M&S investment
  • C&H increased value and style perception. Market share growth across key categories and channels 
  • MS2 driving strong online growth, record active customers and increased retention
  • UK pipeline includes 20 full line stores, enabling 3 full line closures in H1
  • International rebounding despite lockdowns, trading restrictions and EU border costs

Steve Rowe, Chief Executive commented: 

“Given the history of M&S we’ve been clear that we won’t overclaim our progress. Unpacking the numbers isn’t a linear exercise and we’ve called out the Covid bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year. But, thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long term change are beginning to be borne out in our performance.” 

Group Results (26 weeks ended)

2 Oct 21

26 Sep 20

28 Sep 19

Change vs 2019/20 (%)

Statutory revenue





Sales before adjusting items





Operating profit before adjusting items





Profit/(loss) before tax & adjusting items





Adjusting items





Profit/(loss) before tax





Profit/(loss) after tax





Basic earnings/(loss) per share





Adjusted basic earnings/(loss) per share





Free cash flow3





Net debt3





Net debt excluding lease liabilities3





Dividend per share





There are a number of non-GAAP measures and alternative profit measures “APMs”, discussed within this announcement and a glossary and reconciliation to statutory measures is provided at the end of this report. Adjusted results are consistent with how business performance is measured internally and presented to aid comparability of performance. Refer to adjusting items table below for further details. 

1All references to sales, a new APM, throughout this document are statutory revenue plus the gross value of consignment sales excluding VAT.

The Food ex hospitality and franchise APM is based on total revenue rather than like-for-like revenue, as was presented at the 20/21 year-end results. 

Due to a change in the Group’s accounting policy to recognise BACS payments at the settlement date, rather than when they are initiated, the comparative amounts for net debt and free cashflow have been restated.


The combined effects of reshaping the business and the bounce back from the pandemic have driven an encouraging performance across M&S. Profit before tax and adjusting items for the period was £269.4m. Better financial results and a strong focus on working capital management generated free cashflow and a further reduction in net debt. Results include £47.5m of UK business rates relief, and a net rates charge of £50.3m in the period.

A repositioned Food business delivering growth

Consistently strong growth in Food sales of 10.4% and an improving margin mix has helped to deliver a strong increase in operating profit before adjusting items compared to 2019/20. Whilst it is hard to unravel the residual effects of the pandemic, and the bounce back in spending, from the benefits of the reshaping of M&S Food, we are encouraged by the market share gains increasingly being generated in the core categories at the centre of our strategy. Alongside this, Ocado Retail benefited from a step change in the online grocery market and, following the opening of 3 CFCs (Customer Fulfilment Centres) and further planned capacity, will be well positioned to drive customer growth in the coming year. 

Better product and omni-channel strategy deliver sharp uplift online in Clothing & Home

The Clothing & Home business delivered 17.3% growth in full price sales helping to drive a healthy improvement in operating profit before adjusting items. There are early indicators of renewed competitiveness in most categories, with increased market share overall and in both the online and store channels and improving style and value perception. The number of online customers continued to grow, and we have seen stronger retention levels of newer shoppers supported by the Sparks data and personalisation programme. In October, we relaunched the acquired Jaeger business as a digital-first brand, with an encouraging early customer response.

Good progress on rotation of the store estate

We are making good progress on the store rotation programme we set out in May. Initial results from new full line store openings have been encouraging. The pipeline of new full line stores has grown to 20 and now includes six former Debenhams sites, in addition to Leamington Spa which opened in the period. In all of these stores we expect to deliver high volume, enabling consolidation of nearby stores. Wherever possible we will accelerate this programme.

International focused on strong trading partnerships and global online

The International business has also grown online sales, both in markets with M&S stores and on marketplaces. In addition, we have seen a solid recovery in Clothing & Home sales while managing the headwinds of lockdown and restrictions in India plus the impact of EU border costs, primarily affecting Food. Despite these headwinds, International made a solid contribution to group results.

Outlook and path to growth

As we move from the ‘fixing the basics’ phase of the transformation, we are confident of our ability to drive shareholder value in the next phase. Trading for the first four weeks of H2 has been consistent with growth rates reported in Q2 and ahead of plan and we expect the strong demand relating both to the bounce back and improved customer perception to be sustained in the near term. However, well publicised cost pressures will become progressively steeper increasing the importance of our productivity plans, store rotation and technology investment in the coming year. Taking these factors into account and assuming there is no further acute pandemic related disruption, our central case is for profit before tax and adjusting items for the year to be ahead of expectations and in the region of £500m.


M&S Food delivered strong sales growth of 10.4% on 2019/20 and exited the period as the best performing UK grocery chain (Source: Kantar 12 weeks to 3 October 2021). Sales grew 16.9% after adjusting for the adverse impact on the hospitality and franchise travel businesses which are still progressively recovering from the impacts of Covid consumer behaviour. This imbalance was also reflected in the geographical pattern of recovery: compared with 2 years ago M&S Food sales on retail parks were up 23.3%, while Food sales in city centre stores were down 18.4%.

% change to 19/20

% change to 19/20

M& (flowers/hampers/wine)


Shopping centre


Simply Food


High street 


Retail parks


City centre


Franchise fuel


Franchise travel (rail/air/roadside)






Operating profit before adjusting items of £143.7m, as compared to £92.2m in 2019/20, reflected strong sales growth and steady gross margin offset by modest cost growth.

Broadened appeal of the M&S Food range

The transformation of the M&S Food range over the last few years, previously obscured by pandemic distortions, has delivered an improvement in customer perception, strong core sales growth and market share gains. 

  • Product development has been refocussed on the mainstream, improving choice in core product categories such as pasta, ready meals, bakery and wine, as well as seasonal family products and frozen ranges. Perception for quality and in critical areas such as farm standards is now market leading.
  • As part of the shift to trusted value, promotions have been substantially reduced and entry price points have been sharpened with the introduction of the ‘Remarksable’ range and ‘Fresh Market Specials’. The iconic ‘Dine In’ programme has been relaunched and expanded to create more compelling offers for dinner for two, for families and for key events.
  • With that, there has been a sharp improvement in customer value perception and recent market share increased 20bps on 2019/20 with strong growth in the categories that are important to family shoppers such as produce, meat and grocery. Average basket size on everyday shopping trips remains c.30% higher than pre-pandemic levels, even as the frequency of trips is recovering.

Our food-on-the-move and hospitality businesses continued to be impacted in the period. However, since schools and some offices returned to more normal working patterns, sales in city centre, high street and franchise - air and some rail locations - have also improved. Compared to 2019/20 levels, food-on-the-move sales were down 11.4% in September and higher margin hospitality sales were down 34.9%, improving on first half performance which is shown below.

% change to 19/20

% change to 19/20





Grocery & household




Beers, wines, spirits


Meat, fish, poultry, deli, dairy


Produce & flowers






Our Food strategy is to shift to larger stores in the evolving ‘renewal’ innovation format which offer greater choice in core categories in a more operationally efficient way.  The format has now been implemented in 29 new and renewed stores including 14 since our full year results.  Sales in renewal stores opened in the current year have increased 15.7% in the period and 19.0% in September, compared to 2019/20.

Multi-year supply chain efficiency programme underway

The Food business has a multi-year programme to improve efficiency and availability and reduce waste. The Vangarde store process improvements have now been implemented across 75% of the estate. Comprehensive new forecasting, ordering, allocation and space planning systems are under development and commence roll out towards year-end. With our distribution partners, we are also working on plans to create a streamlined, modern, automated network.

As widely reported, there are growing issues of driver, warehouse and supplier labour shortages creating additional pressures for all retailers, including M&S. We have a number of recruitment initiatives which include targeted incentives for drivers. We are also increasing truck, cage and tray-fill, and resetting delivery schedules and depot picking processes to help manage the pressures. We are planning for significant supply chain cost increases in the second half of the year with further on-costs next financial year. However, because of our concentrated supplier base and much improved working relationship with our logistics partner Gist, the Food business is comparatively well placed for these challenges.

Ocado Retail set for rapid capacity growth

Compared to 2020/21, customer orders grew by c.19% and revenue declined 2.7% over the 26 weeks ended 29 August 2021, contributing a share of net income of £28.1m. M&S product sales on Ocado Retail were c.£309m, 27% of total sales.

As expected, revenue was lower compared to 2020/21 as trade annualised against strong performance during the first national lockdown and towards the end of the period was impacted by the fire at the Erith CFC. Average basket size was £124 compared with £151 last year as it returned to pre-Covid levels. The fire at Erith CFC on 16 July and the additional safety measures put in place impacted revenue, which declined 19% in the final 7 weeks of the period.

The pandemic has driven a substantial step up in the penetration of online grocery sales from c.7% of market demand pre-Covid to over 12% today. In the medium term this will create significant growth opportunities for Ocado Retail as it is able to use the superior service and range driven by the CFC model to attract customers newly familiar with online ordering. 

Our objective for Ocado Retail is to drive long term growth and loyalty through better service, quality and more extensive range, underpinned by the M&S brand. 

  • Ocado Retail has plans to reach capacity of c.700,000 orders per week based on pre-Covid basket sizes and will have invested in growing capacity when fully ramped by over 50% since the M&S investment. 
  • The Erith site has reopened and is expected to return to pre-fire capacity by the end of November on release of temporary additional safety measures put in place at the site. New CFC capacity at Purfleet (85k OPW ‘Orders Per Week’) and Andover (60k OPW) is ramping up rapidly and ahead of plan, to be followed by the opening of Bicester (30k OPW) next summer and Luton (65k OPW) in 2023.
  • The Zoom rapid delivery service format will be expanded to a further 3 sites in Ocado Retail’s FY 2021/22.

We continue to have a strong programme of capacity growth in Ocado Retail and we expect to deliver strong revenue growth in FY 2021/22. In the near term, margins will reflect the higher percentage of immature capacity as well as the resumption of normal peaks and troughs associated with trading pre-lockdown. In addition, Ocado Retail has been impacted by the industry wide labour market and logistics issues requiring investment in colleague development, retention and reward which will put pressure on costs in the remainder of our financial year.


Clothing & Home delivered a substantial improvement in profitability with sales down just 1.0% compared with 2019/20 despite lockdown extending into week one of the period. Sales grew in Q2 and overall full price sales were up 17.3% for the period. Operating profit before adjusting items was £156.2m as compared to £109.6m in 2019/20.

MS2 delivered strong online growth, with sales up 60.8% vs 2019/20 and 19.7% compared with last year. Online market share increased 1.1 percentage points compared to 2019/20 in the 12 weeks to 19 September. Online sales represented 34% of Clothing & Home sales in the period, well on the way to our target of over 40%. Online active customers have increased by 60.0% over two years to 9.6m and retention rates are higher than before the pandemic, creating an expanded opportunity for growth.

Store sales declined 17.6% compared with 2019/20. The ‘legacy’ store base meant that the business remained impacted by the enduring weakness of city centre and high street trade. Stores on retail parks were level on 2019/20, while our stores in city centres declined by 32.1%. Nevertheless, store market share was up 0.8 percentage points in the 12 weeks to 19 September.

% change to 19/20

Retail parks




Shopping centres


High Street


City centre


Total C&H stores


Re-engineering of the Clothing & Home product engine

The re-engineering of the Clothing & Home operating model is now demonstrating its potential to reverse years of decline in the business.

  • More focused category management has enabled total option count to be reduced by around one quarter compared with three years ago, resulting in substantially improved line-item rate of sale. For instance, in our ‘hero’ category of women’s denim, sales per option are up 56% on 2019/20 from 29% fewer options. 
  • Over 1,300 colleagues have been trained in efficient buying and merchandising in the ‘Never the Same Again academy’. Combined with a test and repeat programme and new tools to accurately rank and plan product, this is having a positive impact on product appeal and finish.
  • Alongside the reduction in duplication and creation of a more focused core range, we have broadened choice in growth areas such as activewear, kids’ daywear and home.        For instance, the Goodmove activewear brand has seen very rapid growth since its launch prior to the pandemic and our girls’ daywear market share has grown by 160bps.
  • Nine weeks have been taken out of the womenswear ‘critical path’ resulting in orders being placed closer to the date of sale, speeding up the supply chain. This has helped support the business which has traded with three weeks less stock compared with 2019/20.
  • The combination of these changes has also enabled a significant shift towards ‘every day low prices’. The intensive promotions of the past including the quarterly ‘friends and family’ discount events have been removed and only partially replaced by personalised discounts through Sparks. Overall, the volume of stock into the clearance sale has reduced by over 50%. 
  • Product display has also been updated both in store and online with initiatives such as ‘The Edit’ in womenswear which seeks to create a more inspiring store environment backed by volume stock commitment in popular lines.
  • These changes have driven an improvement in customer perceptions of value for money with M&S Clothing now holding a leading position, alongside our continued lead on quality.

As illustrated in the tables below, overall performance in the first half remained skewed towards more casual categories. However, since the return to offices in September, performance in formal categories has improved with suits up 3% on 2019/20 and trousers up 8.7% in the month.

% change to 19/20



% change to 19/20



Lingerie & essentials















Shoes & accessories



Women's outerwear



Home & Beauty









MS2 beginning to prove the power of the omni-channel strategy

MS2 continues to progress and drive strong results for the online business. We have one of the largest active online customer bases in the UK and an opportunity to drive sales through increased frequency, recency and spend. We aim to achieve well over 40% of Clothing & Home sales through online in three years compared with 34% in H1.

MS2 was created to bring the online, digital and data teams together to improve the online offer and draw on the group’s customer data and the relaunched Sparks loyalty programme to personalise selling. Our objective is to match the speed and flexibility of pure play competitors with the advantages of an omni-channel fulfilment strategy using the store base for click and collect, returns, and rapid fulfilment.

Sparks and the M&S App creating competitive advantage

  • We have seen continued improvement in website performance and useability with mobile now accounting for c.50% of orders, of which almost half are generated through the M&S App. 
  • The relaunched Sparks loyalty and personalisation programme now has over 13m members, and the M&S App user base has grown to over 3m. The combination of Sparks and the App user base creates powerful advantages in online marketing as well as better service for customers. 
  • The App also gives access to digital services such as bra fit appointments, ‘scan and shop’ in Food and easy online collection and returns. 

Investment in fulfilment providing resilience

  • Capacity and productivity at our Castle Donington fulfilment centre has proved resilient and we expect to extend output to handle continued growth alongside an investment in online fulfilment capacity at Bradford.
  • To develop our omni-channel approach, systems changes have enabled rapid growth of low-cost store-based online fulfilment. This enables stock to be picked in a customer’s preferred store of collection and paves the way to a rapid same day fulfilment service as well as reducing ‘trapped stock’ in stores. 
  • In the first half, store-based fulfilment was 57% up on 2019/20 and accounted for 9% of click and collect sales.

M&S brand platform extending customer reach

  • In October we relaunched the acquired Jaeger business and have generated an encouraging customer response. Jaeger stands for effortless elegance, styled in an inclusive, modern, British way. The brand is built as digital first but ultimately with an omni-channel vision and is able to capitalise on the advantages that the M&S infrastructure and platform can bring.
  • The emerging platform strategy has produced encouraging results with strong initial sales from our newly launched brands. M&S now trades with over 30 partners from Sloggi lingerie to Ghost dresses to Clarks school shoes. The majority of the brands will be online-only but we plan a limited presence of leading brands such as Jaeger and Clarks in our largest high-footfall shops during H2.        
  • The average online basket size for brands is more than twice the average for M& with brands contributing c.3.5% of total online sales in H1. 


At the year-end we set out our goal of achieving a modernised full line estate of c.180 stores through store rotation, reflecting the accelerated channel shift post pandemic. Rotation means closing at least 110 locations and relocating to either a new full line or food-only store and in many cases consolidating multiple stores into one.

The pandemic has further polarised store performance with very significant decline in sales in some locations and improved performance in others. At the same time, some of the older M&S stores are high cost to operate with multi-floor facilities and stock rooms which are too expensive to modernise. 

Promising early results from rotation

  • Store rotation allows us to break the paradox of short-term profit considerations and lease exit costs which have previously inhibited the pace of change. 
  • As a result of accelerated channel shift, we have been able to generate over 30% Clothing & Home sales recapture in nearby stores or online from many store closures to date, offsetting much of the contribution lost from closure.
  • We have also generated encouraging initial results from new full line store openings such as Nottingham Giltbrook, Sears Solihull, and Maidstone Eclipse with a very good customer reaction and paybacks in line with plan. 

Good progress on renewing the full line estate

  • The pipeline of new full line stores is showing encouraging growth with 20 already identified over the next three financial years. These include six former Debenhams sites, in addition to Leamington Spa which opened during the period, all of which we expect to deliver high volume allowing consolidation of nearby stores.
  • All new stores are opened with our renewal format in Food and emerging new approach to Clothing & Home layout, décor and display. We intend to incorporate our ‘digital store’ initiatives providing for rapid fulfilment and returns.
  • We now have around 20 asset management projects under consideration for feasibility which will free up cash to help finance the store rotation. We are engaged in constructive discussions with multiple landlords about initiatives such as repurposing buildings and joint development programmes helping to release ‘hidden value’ in the M&S estate. 

In addition, in stores which are well located but have surplus Clothing & Home space, we have a programme to fallow, reallocate to Food or repurpose space for in-store fulfilment.  

Good examples of store rotation and consolidation acted upon in the period


During the first half we relocated the aged Paisley town centre Clothing & Home outlet and Food store, which had sharply declining sales, to a modern Foodhall on the adjacent retail park with good access and parking. The cash closure costs of the legacy site have been partially funded with a freehold disposal, and the new site is trading ahead of plan.




Retail Park


Business Case

Sales ex VAT (£m)



LFL (%)



Cash profit (£m)



Net cash relocation costs (£m)



Leamington Spa

In Leamington Spa we have recently consolidated two units into one, by closing a clothing site in the Royal Priors shopping centre and the Warwick Simply Food and extending a new Food site at Leamington Shopping Park into the former Debenhams next door to create a new prime full line store. The incremental cash contribution net of closure costs is expected to generate payback on the net capital invested in under four years.


Town Centre


Simply Food


Shopping Park



Business Case

Sales ex VAT (£m)




LFL (%)




Cash profit (£m)




Net cash relocation costs (£m)



Our objective is to create a growing International business through strong partnerships and a multi-platform online business with global reach. International sales in H1 reflected the strong rebound of activity in the Republic of Ireland upon reopening and in India in Q2 following lockdown.  International online sales grew strongly, both in markets with an M&S store presence and through marketplace growth led by Zalando. 

Operating profit before adjusting items of £35.9m included operating costs of c.£13m due to ongoing EU border issues, largely relating to our Republic of Ireland business following Brexit.

  • We have an ambition to double the International online business over the next three years. In the first half, sales increased 142% on 2019/20 and grew 29% against the prior year. Growth has been driven by the Republic of Ireland and India, broadening the number of markets with an online presence and rapid scaling of our wholesale relationship with Zalando marketplace.
  • The Clothing & Home store business in the Republic of Ireland has seen rapid recovery following reopening. However, we are working to mitigate the very substantial headwinds relating to the impact of EU border issues on the Irish Food business, including restructuring the cost base and a planned step up in local sourcing. During the first half we also announced a restructuring of our Food operations in continental Europe, as a result of EU border costs.
  • The joint venture in India is now well embarked on an omni-channel strategy and will launch an M&S App later this year which will enable us to create a single view of the customer and drive an experience similar to the UK. With our joint venture partner, Reliance Retail, we now operate 93 stores in India.
  • We continued the renewal of the International store estate despite lockdowns and restricted trading conditions. For instance, during H1 we modernised stores in Singapore with the expansion of Wheelock Place and Vivo City and opened digital stores at Yas Mall in Abu Dhabi and Phoenix High Street in India.
  • To reduce lead times, improve stock presentation and order visibility for International partners we opened a new UK hub which enables deliveries to bypass the UK network. To address EU border issues and improve speed to market, we also plan to open an EU hub in Croatia in 2022.


As we move from the ‘fixing the basics’ phase of the transformation, we are confident of our ability to drive shareholder value in the next phase. In the main businesses there is demonstrable scope for further improvement and the customer response to the transformation has been encouraging.

Trading for the first four weeks of the second half has remained consistent with growth rates reported in Q2 and ahead of plan. In the near term we expect the strong demand relating both to the bounce back and improved customer perception to be sustained in the second half. 

However, well publicised supply chain pressure, combined with pandemic supply interruptions, rising labour costs, EU border challenges and tax increases means the cost incline becomes steeper in the second half and steeper again in the 2022/23 year. That will increase the importance of our productivity plans, store rotation and technology investment.

Taking these factors into account and assuming there is no further acute pandemic related disruption, our central case is for profit before tax and adjusting items for the year to be ahead of expectations and in the region of £500m.

Capital expenditure, partly as a result of supply chain delays is running behind plan at around £250m.  As a result, net debt is likely to reduce more than previously anticipated, and we are strengthening the balance sheet in anticipation of the growth opportunities ahead.

As we enter the new phase, we expect to bring forward our plans for continued far-reaching changes in the shape of the business.  Financially, our objectives over the next three years remain progressive growth in sales, market share and profit in Food, Clothing & Home online sales to exceed 40% of total sales, and delivering an overall Clothing & Home profit margin in excess of 2019/20 levels.

Our capital allocation priorities also remain unchanged. Firstly, we will invest in the transformation of the business to return to sustainable profit growth. Alongside this, we will prioritise the recovery of balance sheet metrics consistent with an investment grade rating. We will assess the reintroduction of dividend payments in this context although this remains unlikely in the current year.

We will report trading for the third quarter on 13 January 2022.

For further information, please contact: 

Investor Relations:                                                              

Fraser Ramzan:                     +44 (0)20 3884 7080

Jack Cook:                             +44 (0)20 3882 5535

Media enquiries:

Corporate Press Office:      +44 (0)20 8718 1919

Investor & Analyst presentation and Q&A: 

A pre-recorded investor and analyst presentation will be available on the Marks and Spencer Group plc website from 7:30am on 10 November 2021. 

Steve Rowe and Eoin Tonge will host a Q&A session at 9.30am on 10 November 2021:

Dial in number: +44 (0)800 279 7204/+44 (0)330 336 9424                       Confirmation code: 2955677

Please join 5 minutes prior to the scheduled start time.

Link to skip the virtual queue here

A recording of this call will be available until 11am 17 November 2021.

Dial in number: +44 (0)20 3859 5407                                                           Confirmation code: 2955677

Fixed Income Investor Conference Call:

This will be hosted by Eoin Tonge, Chief Finance Officer, at 2pm on 10 November 2021:

Dial in number: +44 (0)800 279 7209/+44 (0)330 336 9434                       Confirmation code: 7732156

A recording of this call will be available until 11am 17 November 2021.

Dial in number: +44 (0)20 3859 5407                                                           Confirmation code: 7732156

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