RESHAPING
Marks and Spencer Group plc
Annual Report and Financial Statements 2025
Marks and Spencer Group plc Annual Report and Financial Statements 2025
OUR VISION
To be the most trusted retailer, doing the right thing for ourcustomers, with quality products at the heart of everythingwedo.
OUR PURPOSE
To bring the magic of M&S, through exceptional quality, value, service and innovation to every customer.
Whenever, wherever and however they want to shop with us.
OUR STRATEGIC PRIORITIES
Create exceptional products Drive profitable sales growth Deliver target operating margins
Build the M&S we need to be
OUR BEHAVIOURS
Close to
customers,
close to
colleagues
We say it,
we do it
We tell as
it is
We always
aim higher
We work
selflessly
Spend wise,
save well
See People and Culture on pages 32 to 35.
See Strategic Progress on pages 12 to 21.
Marks and Spencer Group plc Annual Report and Financial Statements 2025b
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Introduction
2 Highlights of the Year
3 Chairman’s Letter
4 Chief Executive’s Review
6 Our Markets
8 Our Business Model
9 Stakeholder Engagement
Strategic report
12 Strategic Progress
22 Our Key Performance Indicators
23 Financial Review
32 People and Culture
36 ESG Review
38 TCFD
51 Non-Financial and Sustainability
Information Statement
52 Risk Management
54 Principal Risks and Uncertainties
59 Our Approach to Assessing
Long-Term Viability
Governance
60 Chairman’s Governance Overview
62 Our Board
64 Our Governance Framework
66 Board Activities
68 S.172 Statement
71 Board Review
72 Nomination Committee Report
74 ESG Committee Report
76 Audit & Risk Committee Report
84 Remuneration Committee Report
87 Remuneration in Context
89 Summary of Remuneration Policy
91 Remuneration Report
104 Other Disclosures
Optimising our Annual
Report and Accounts
This year, we have made several
changes to optimise our Annual
Report and Accounts for online
viewing in response to evolving
shareholder preferences. In the
last decade, there has been a
60% increase in the number of
shareholders signed up for
e-communications.
For the best experience,
view online at corporate.
marksandspencer.com/
annualreport2025.
Alternative
performance measures
This report provides alternative
performance measures (‘APMs’)
which are notdefined orspecified
under the requirements of
UK-adopted International
Accounting Standards. Webelieve
these APMs provide readers with
important additional information
on our business.
We have included a glossary
onpages 194 to 199 which
provides a comprehensive list
ofAPMs that we use, including
an explanation of how they are
calculated, how we use them
andhow theycan be reconciled
to a statutory measure
whererelevant.
APM
Financial statements
110 Independent Auditor’s Report
122 Consolidated Financial Statements
128 Notes to the Financial Statements
183 Company Financial Statements
186 Notes to the Company Financial
Statements
192 Group Financial Record
194 Glossary and APMs
200 Notice of Annual General
Meeting2025
217 Shareholder Information
219 Index
Marks and Spencer Group plc Annual Report and Financial Statements 2025 1
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
HIGHLIGHTS OF THE YEAR
Financial Strategic
Strong financial and strategic progress in 2024/25 as M&S continues to Reshape for Growth.
Group revenue
£13.8bn
23/24: +6%
Group profit before tax
£511.8m
23/24: -23.9%
Net funds excluding
lease liabilities
£437.8m
23/24: +858%
24/25 511.8
23/24 672.5
22/23 475.7
24/25 437.8
23/24 45.7
22/23 (355.6)
Basic earnings per share
14.6p
23/24: -33.3%
Group profit before tax
andadjusting items
£875.5m
23/24: +22.2%
24/25 13.8
23/24 13.0
22/23 11.9
24/25 875.5
23/24 716.4
22/23 453.3
Adjusted basic
earnings per share
31.9p
23/24: +29.7%
24/25 14.6
23/24 21.9
22/23 18.5
24/25 31.9
23/24 24.6
22/23 16.9
APM
APM
APM
Food: volume growth
6.7%
23/24: +1.5%
Fashion, Home & Beauty: market share
10.5%
23/24: +5%
24/25 10.5%
23/24 10%
22/23 9.6%
New Full Line stores
2
23/24: 6
New Food stores
8
23/24: N/A
24/25 2
23/24 6
22/23 3
24/25 8
23/24 8
22/23 6
App percentage of online orders
54%
23/24: +22.7%
Raised for Young Minds
£2.7m
23/24: +59%
24/25 54%
23/24 44%
24/25 2.7m
23/24 1.7m
24/25 6.7%
23/24
22/23
5.2%
2.1%
Marks and Spencer Group plc Annual Report and Financial Statements 20252
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Use the QR
code to watch
Archie’s video
CHAIRMAN’S LETTER
Dear Shareholder
The business world today rarely moves in
straight lines and just as you think life has
become more predictable, events have a
way of upending the best performing team
and bringing us all back to the ground.
At the time of writing, the business has been pre-occupied
with handling the aftermath of the cyber incident that
affected us after the year end. Although the impact is
significant and will endure for some weeks, or even months,
I am confident that, in the fullness of time, M&S will
recover the formidable momentum in trading performance
we demonstrated in the last year and bounce back better
and stronger.
During the last three weeks the Executive team has been
steadfast in responding to the attack which has been all
absorbing and the Board has been fully informed and
engaged. As a result the 2024-25 results, the main
subject of this report, seem to be very historic. However,
they are important not just because they show a third
year of improvement in overall sales, market share, profit
and cash flow but also because they demonstrate the
momentum and potential in the “reshaping” strategy as it
takes hold.
Our strategy, which was born of the turnaround plans
launched some years ago, is now built around “Reshaping
for Growth”. In a business with growth in profit and no
financial debt it is hard, even for an impatient Chairman,
to argue that we are still in turnaround mode. However, it
is important that the “spirit of the turnaround” remains
with us and that is why Stuart Machin has coined the
phrase “positively dissatisfied”. It is our objective to drive
the pace of change to build the business for growth and
success now and in the next 100 years.
Our confidence in the programme derives from the fact
that there is so much in our two main businesses that still
requires investment and change: legacy systems; a
supply chain in both Food and Fashion, Home & Beauty
which is well below industry leading standards and in
some cases inefficient; an improved online performance
It is important that the
“spirit of the turnaround”
remains with us.
but one which is not best in class in the way we trade,
takeorders or fulfil for customers. All that represents
potential for the future and, because of the strength of
our trading and cash flow, we are now able to increase our
investment rate.
In both main businesses what we have demonstrated is
the power of product. Where we have launched stylish
quality fashion at great value the customer response has
been strong and our Food business is now innovating
great food with increasing focus on health and freshness.
In a retail industry where innovation has slowed, we are
investing heavily in our new formats and the management
team, talent and culture is strengthening all the time.
We operate a highly engaged Board model and I am
grateful to all Board members for their contribution.
Jeremy Townsend, who stepped in as Finance Director
three years ago, is now leaving with our great thanks. He
brought calmness and strength to the finance function
and is succeeded by Alison Dolan who joined us early in
the year.
I am confident that in a year’s time the cyber incident will
prove to have been a bump in the road along the path to
growth, even if it does not feel like that today. However,
coming on top of a very strong trading year it has
stretched the sinews of the management team and we
have seen an extraordinary response from our colleagues
in the Support Centre, in our logistics centres and
particularly in our stores.
I particularly want to recognise the efforts
ofour front-line colleagues; forthethird
yearinarow, M&Shas made arecord
investment–£95m–in store
colleague pay.
Our thanks go to them all and to our
customers,shareholders, suppliers
andpartnersforwhose support
we arevery grateful.
Yours sincerely
Archie Norman
Chairman
Marks and Spencer Group plc Annual Report and Financial Statements 2025 3
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CHIEF EXECUTIVE’S REVIEW
Three years ago, we introduced our
“Reshaping M&S for Growth” plan with the
objective of protecting the magic of M&S
and modernising the rest. Executing that
strategy has delivered a third consecutive
year of growth in sales and market share,
profit and improving return on capital.
Disciplined capital allocation and a much
stronger balance sheet have put M&S on
a robust financial footing, increasing
resilience and creating capacity for future
growth. M&S has net funds of over £400m
and we are in our best financial health for
nearly 30 years.
Our Food business had another strong year as more
customers chose to fill their trolleys with M&S food, more
often. Our continuous investment in quality, value and
innovation is paying off. We’ve outperformed the market
over the past three years and I’m confident we will
continue the momentum and grow a bigger, fresher
Foodbusiness.
In Fashion, Home & Beauty, our authoritative lead in
quality and value perception and much improved style
credentials has broadened appeal and grown market
share. This renewed strength in product gives us the
foundation to drive future growth through transforming
our end-to-end supply chain and accelerating online.
Consistent market outperformance over the past three
years demonstrates the improvements we’ve made and
I’m confident that with focused execution, we can deliver
our plan.
Overall, last year was another year of strong performance,
and there are so many opportunities still ahead of us. As
outlined at last year’s Capital Markets Day, we will continue
our plan to invest in our key growth areas: Store rotation,
supply chain and technology.
We started the new financial year as we finished the
last,with sales growth ahead of budget across both
businesses. Over the last few weeks, we have been
managing a highly sophisticated and targeted cyber-attack
which has led to a limited period of disruption. Wehave
tackled this head on with incredible spirit, teamwork and
deep sense of responsibility as we prioritised serving
ourcustomers.
It has been challenging, but it is a moment in time, and
we are now focused on recovery, with the aim of exiting
this period a much stronger business. There is no change
to ourstrategy and our longer term plans to reshape
M&Sfor growth and if anything, the incident allows us
toaccelerate the pace of change as we draw a line and
move on.
Over the last 140 years, M&S has overcome many
challenges – testament to the longevity of this brand.
This incident is a bump in the road, and we will come out
of this in better shape and continue our plan to reshape
M&S for customers, colleagues and shareholders.
I would like to thank all of our colleagues and supplier
partners for their hard work and dedication and,
importantly thank our customers. They have been
unwavering in their support, and we are incredibly
grateful for their patience and trust in M&S.
Stuart Machin
Chief Executive Officer
Marks and Spencer Group plc Annual Report and Financial Statements 20254
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Disciplined capital allocation and
amuch stronger balance sheet
have put M&S on a robust financial
footing, increasing resilience and
creating capacity forfuturegrowth.
Stuart Machin
Chief Executive Officer
Hear more from Stuart on
our financial and strategic
performance here.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 5
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FOCUS ON VALUE
What’s the trend?
•
Cost-of-living pressures continue to
be front of mind for customers which
means there is a focus on value.
OurCustomer Pulse survey shows
that customers are most worried
about rising energy bills (80%), the
cost of groceries (78%), Council Tax
(76%) and higher water bills (69%).
•
However, customers want to make
sure they are getting the best
quality for the best price. 95% of the
Collective – a community of 43,000
M&S Food customers – told us that
getting ‘good value from the products
Ichoose’ is more important than
‘choosing the cheapest product’.
•
This year, there has been a shift
towards consumers choosing to eat
at home more often. In January,
eating out in pubs and restaurants
fell by 2.1% year-on-year while sales
of food being consumed athome
has increased.
How is M&S responding?
•
M&S is committed to investing in
trusted value and reducing promotions
as part ofour ‘right price first time’
promise tocustomers.
•
In Food, prices were ‘dropped and
locked’ on key shopping list items
such as salmon fillets and fresh
soups and ‘Remarksable Value’ lines
such as potatoes and tinned
tomatoes. This helped to increase
customer value perceptions of M&S
to a 10-year high in an increasingly
promotional market.
•
The popularity of ‘Dine In’ has
increased as more customers have
looked to obtain restaurant quality
meals at home. This year, we
relaunched our Gastropub range,
and introduced the first retail
partnership with Tom Kerridge as
part of the transformation. Sales
grew by 15% with Tom Kerridge lines
delivering 7% of sales growth.
•
In January, we announced a 20%
reduction on over 100 products from
the ‘everyday essentials’ Kidswear
range. We know families want the
confidence that products are good
value but also are made well and
made tolast.
•
For the fourth year in a row, we
protected the price of our market
leading quality school uniform.
Every item is designed to bedurable
and pass the ‘hand-me-down’
quality test, and we also offer an
extended 100-day returns period on
school uniform.
OUR MARKETS
HOW M&S IS
RESPONDING TO
THE CONSUMER
ENVIRONMENT
Marks and Spencer Group plc Annual Report and Financial Statements 20256
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
HEALTH & WELLBEING
What’s the trend?
•
Health and wellbeing is high on the
agenda for customers with mental
health becoming a growing priority
for many families. Research from
Mind reveals that one in five children
and young people experience a
mental health problem eachyear.
•
Healthy diet continues to be
important to many with four out of
five of the Collective saying that
they are ‘trying to maintain a
balanced diet in order to be healthy’.
•
Customers are also more frequently
making choices to address certain
aspects of their health, with trends
from gut health to highprotein
continuing to drive interest.
Overhalf (55%) of the Collective said
they have awareness of eating to
increase brain health.
•
The trend of being increasingly more
active prevails as more people are
aiming to be more physically active
more often. Almost one in four of
the Collective said they have been
active in the past seven days, while
41% of M&S customers said that
fitness is a cornerstone of their
dailylife.
How is M&S responding?
•
We are committed to making it easier
for customers to make healthier
choices in ways that work best for
them and their families. We lead the
grocery market for health perceptions.
•
Our headline partnership with
YoungMinds, the leading mental
health charity for young people,
hascontinued to raise awareness
and much needed funds for those
struggling with their mental health.
Since the launch of the partnership
in October 2023, M&S has raised £4.4m.
•
In January, we launched the M&S
Brain Food range developed in
partnership with the British Nutrition
Foundation. The range includes 13
lines offering six key brain health
supporting nutrients that people
lack in their diets and has proven
popular with customers with 115,000
Brain Food Brain Balls being sold in
January alone.
•
In Fashion, Home & Beauty, we have
welcomed new brands including
Reebok and Puma to ‘The Sports
Editon M&S’ platform this year,
offering customers greater choice
inperformance footwear
andathleisure.
OUR MARKETS CONTINUED
MORE SUSTAINABLE CHOICES
What’s the trend?
•
Making more sustainable choices is
increasingly important to customers.
78% of UK consumers consider
sustainability an important factor
intheir purchasingdecisions.
•
Our quarterly ESG Reputation Tracker
– a survey of 20,000 consumers to
understand their views of ESG trends
and perceptions of retailers in
response to those trends – shows
usthat animal welfare, sustainable
sourcing and reducing waste continue
to be the most important ESG issues
for customers.
•
Customers are increasingly placing
greater value on animal welfare, with
85% of adults expressing trust in UK
farmers. Notably, 74% value animal
welfare in food production, up from
57% in 2023.
•
Reducing food waste is a growing
priority for customers. 84% of UK
consumers say reducing food waste
is important to them, with many
citing rising food prices as a reason
for cutting waste.
How is M&S responding?
•
Our vision is to be the most trusted
retailer, doing the right thing for our
customers, with quality products at
the heart of everything we do. Having
strong sustainability credentials plays
a key role in helping to drive our
quality perceptions and our quarterly
ESG Reputation Tracker shows that
M&S leads the market in terms of ESG
trust with consumers.
•
This year, we donated the equivalent
of 30m meals in surplus food
through
our partnership with Neighbourly,
reaching the milestone of donating
the equivalent of 100m meals over
the last decade. The partnership has
supported 4.7m people across the UK.
•
In August, we launched our online
repair service in partnership with
tailoring and repairs specialists
SOJO. Feedback from customers
who have used our service so far
shows that 82% would not have worn
the item if they had not had it
repaired, and 55% would’ve thrown
the item away or given ittocharity.
•
We go to great lengths to source and
make our products with care. We have
been a partner of Better Cotton since
2009, and all the cotton used in our
clothing is 100% responsibly sourced.
All cotton used in our Spring Summer
25 collection used fully traceable
cotton for the first time.
•
In March, our M&S Select Farm
standards were recognised as
leading the way by ‘The Business
Benchmark on Farm Animal Welfare’.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 7
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Creating value for all stakeholders
CUSTOMERS COLLEAGUES SHAREHOLDERS
SUPPLIERS PARTNERS COMMUNITIES
OUR BUSINESS MODEL
M&S is a leading British retailer, bringing exceptional quality, value,
service and innovation to our 32m customers, whenever, wherever
and however they want to shop with us. Our vision is to be the
most trusted retailer, doing the right thing for our customers,
withquality products at the heart of everything we do.
Exceptional products,
trustedbrand
M&S offers exceptional quality own-brand
products at value customers can trust. Innovation
is at the heart of the design and development of
products, which are sourced with care, through
longstanding trusted supplier partners. In Food,
quality and value perceptions are at their highest
in a decade and we have maintained our leading
position for quality and value in Fashion with style
perceptions continuing to rise.
Closer to customers
32m customers shopped with M&S this year with
96% of the UK population living within 25 minutes
of an M&S store. At the heart of a culture that is
sleeves rolled up is a focus on getting closer to
customers so we can continuously improve our
products and deliver brilliant service. M&S has
been voted the UK’s best brand (source: YouGov)
for the past three years and that is something we
never take for granted.
Closer to colleagues
Our 63,000 colleagues all have a role to play in
reshaping M&S and delivering for our customers.
They bring extraordinary passion for the business
and extensive technical expertise in areas such as
sourcing, design, product development and data &
technology. Read more on how we are driving a high
performance culture on pages 32 to 35.
Omnichannel capability
M&S has 1,053 UK-owned and franchise stores,
connected to our network of digital shopping
channels, including our Fashion, Home & Beauty
website and app, with 34% of sales now through
online channels. M&S also has a 50% investment
inOcado Retail, which has grown faster than
themarket in value and volume for the last
17consecutive four weekly periods. The business
also has a presencein32 international markets.
Strong supplier and partner
relationships
As an own-brand retailer, our strong strategic
partnerships with suppliers are essential to
delivering quality, value, style and innovation
forour customers. Our long-term, differentiated
partnerships support investment in more sustainable
solutions and give specialised capabilities.
WHAT MAKES
US M&S?
Read more about our Strategic Progress on pages 12 to 21.
Read more about our approach to ESG in our corporate.marksandspencer.com/ESGreport2025.
Marks and Spencer Group plc Annual Report and Financial Statements 20258
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
M&S
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STAKEHOLDER ENGAGEMENT
CUSTOMERS
Why they are important to us
If we serve our customers well, we serve our
shareholders well. Our vision is to be the most
trusted retailer, doing the right thing for our
customers, with quality products at the heart
ofeverything we do.
What we heard and how
weresponded
Closer to customers
Getting closer to customers is a core feature of the
transformation of our business. One way we do this is
through regular focus groups; Executive Committee
members run quarterly customer listening groups.
During the year, these have included:
•
Food customer focus groups. Our Food
leadership team took part in small group
discussions with some of our family shoppers
in August. Customers shared their love of our
ready meals and Dine In options for making
their lives easier whilst still offering something
healthy for their children, but also shared that
our Dine In portion sizes aren’t always suitable
for them. We’ve now introduced a family Stir Fry
Dine In, as this was one of the most popular
offers amongst this group.
•
Fashion, Home & Beauty customer focus groups.
Live focus groups for Womenswear and Menswear
were held, where customers shared their
opinions on product and shopping experience
improvements. Wealsoheld ‘Insight Fest’ in
June 2024, afullday dedicated to customers.
Over 200colleagues attended sessions, which
included a variety of nationwide customer
focus groups as well as live interviews with
customers in store about the Summer
collection. In Womenswear, customers told us
they were looking for some more ‘stand out’
occasionwear, which resulted in the launch of
our ‘RSVP’ collection this coming summer.
The Collective
This year, we sent around 200 surveys to ‘The
Collective’, our online community of 43,000 M&S
Food customers. These surveys covered general
customer mindset and specific input on category
changes. The feedback has shaped our future
strategy, including creating targeted marketing
plans, guiding major category transformations in
Frozen and Deli, and influencing other projects
such as the range of turkeys we stock at
Christmas, branding for our Roast and Ritual
coffee, and benefits for our Sparks ‘parent hood’
baby club.
c.93k
hours worked in stores by Support Centre
colleagues over Christmas
COLLEAGUES
Why they are important to us
Retail is a people business. That’s why we’re
driving a high-performance culture that is closer
to colleagues and closer to customers. Every one
of our 63,000 colleagues has a role to play in
transforming M&S.
What we heard and how
weresponded
Simple for stores
We are at the beginning of this programme but it
is a big area of focus. Store leaders told us we
needed to simplify communication, and we have
responded by continuing to utilise tools through
our partnership with WorkJam, a communication
and engagement platform. It has enabled us to
target communication to specific positions in
stores, sending tasks direct to the right
colleagues, saving valuable management time.
It’s also been beneficial for sharing product
engagement. We launched a ‘Let’s Sell’ page
across both Food and Fashion, Home & Beauty to
better share product information with colleagues.
Short videos are used to highlight product
features and benefits, helping colleagues
bringthis to life for customers in store.
Straight to Stuart
Now in its third year, the Straight to Stuart
scheme, which gives colleagues the opportunity
to share ideas direct with the CEO, saw more than
6,500 submitted this year. Around 100 of these
ideas have been progressed to make M&S a better
place to shop for our customers, and a better
place to work for our colleagues. One idea submitted
from a colleague in our Newport store led to the
launch of a range of knickers for people living
with stomas.
Christmas Elfing
As part of building a culture where everyone
issleeves rolled up, closer to customers and
closerto colleagues, Support Centre colleagues
nowspend at least seven days each year
workinginstore. The Support Centre delivered
unprecedented support to stores this year,
completing nearly 12,000 shifts and over 93,000
hours over Christmas – a 95% increase from last
year. Based on last year’s feedback from stores
that support wasn’t available during the busiest
times, we condensed support days to focus on
key trading days, ensuring assistance was
provided when it was most needed.
Read more on colleague engagement in our
People and Culture section on pages 32to 35.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 9
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STAKEHOLDER ENGAGEMENT CONTINUED
SHAREHOLDERS
Why they are important to us
Continuous engagement with both our institutional
and private shareholders builds trust and secures
their investment and support. With our large private
shareholder base, we run a tailored engagement
programme to ensure our decisions reflect
theirviews.
What we heard and how
weresponded
AGM
We are committed to leading on shareholder
engagement and continue to believe a
digitally-enabled meeting is the best way for
directors to interact with the broadest range of
shareholders. Since adopting a digital approach
in 2019, we have seen engagement levels increase
by 200%. Listening to shareholder feedback
helped shape the digital-first, hybrid format of
our 2024 meeting. 40 shareholders attended in
person while 1,806 engaged digitally with positive
feedback received on the viewing experience.
Details about our 2025 AGM can be found in the
Notice of Meeting on pages 200 to 216.
Optimising our Annual Report
In the last decade, the number of shareholders
signed up for e-communications has increased
by60%. In 2023/24 98% of our shareholders
received the report digitally versus 2% who
received a print copy. To optimise our Annual
Report and Accounts for online viewing, this year
we have taken a digital-first approach, including
moving to landscape orientation, integrating
videoand improving navigation.
Engagement with
institutionalfunds
During the year members of our Board
andInvestor Relations team met over 200
institutional funds, engaging with investors who
we estimate represent close to 40% of our issued
share capital. This year, institutions told us
long-term growth remains their top priority,
withrecognition that further investment in
storerotation, supply chain and technology is
required to enable future growth plans. Having
strengthened our balance sheet and continued
toreduce net debt in the first half of the year,
aninterim dividend of 1p per share was paid in
January 2025. The Board is recommending a
finaldividend of 2.6p per share, subject to
shareholder approval at the AGM. Read more
onpage 204.
Capital Markets Event
Our Capital Markets Event (‘CME’), held in
November 2024, gave investors the opportunity
tohear directfrom our leaders in greater depthabout
the progress made so far in our transformation
and our priorities moving forward. A new feature
of this year’s event was a ‘trade fair’ breakout
session, where 16 members of the wider leadership
team were available to answer more detailed
questions on topics ranging from ESG to supply
chain. This year, 70 investors attended in person
with the webcast having now seen over 900 views.
Use the QR
code to watch
the CME.
SUPPLIERS
Why they are important to us
As an own-brand retailer, our suppliers are
essential to making sure we deliver high-quality
products at trusted value for our customers.
These long-term strategic partnerships allow
usto invest in sustainable solutions and drive
greater innovation. Our success is closely tied to
the performance and reliability of our suppliers.
What we heard and how
weresponded
Fashion, Home & Beauty
SupplierSummit
Following the success of our 2023 Supplier
Summit, we invited 20 of our key strategic
partners back to London in October 2024 for a
follow-up summit. In the three months leading
upto the event, we collaborated closely with
suppliers on projects addressing digital
transformation, improving lead times, ethical
purchasing practices, net zero goals and
sustainability, and driving innovation. During the
event, supplier partners presented their solutions
and ideas, reinforcing our partnership and
commitment to long-term success.
International social projects
Enhancing the livelihoods of people and
communities in our supply chain is a key priority
for M&S. Following feedback from our Key Supplier
Summit in October 2024, we updated our ethical
policies and supplier guidelines and provided
internal buyer training. We also implemented
social projects focusing on women, including
financial literacy training in Cambodia and
Vietnam, gender equality programmes in
Bangladesh and Cambodia, strengthening
maternity rights in Bangladesh, and providing
education opportunities to girls in New Delhi.
200
institutional investors
engaged
20
international suppliers attended
ourFH&B SupplierSummit
Food supplier briefings
We held two supplier briefings in June and
September 2024. Suppliers were invited to hear
about M&S’ priorities for the year ahead in June,
with the September briefing focusing on peak
delivery. Trusted value, innovation, availability
and quality were the key themes of discussion.
These priorities guided our collaborative efforts
throughout the year, aiming to achieve mutually
beneficial volume growth.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMMUNITIES
Why they are important to us
M&S serves 32m customers, has 63,000 colleagues
and operates in 32 international markets. Therefore,
we need to make sure we have a positive impact
on the communities we serve.
What we heard and how
weresponded
YoungMinds
In October 2023, we launched our new headline
charity partnership with YoungMinds, the UK’s
leading mental health charity for young people.
Since the launch, M&S has raised £4.4m, enabling
YoungMinds to support young people and the
adults in their lives. With M&S donations,
YoungMinds has improved the performance of its
Helpline services, increasing its phone call answer
rate and visits to the parents and carers section of
the website. More information on our partnership
can be found on our website.
Go to corporate.marksandspencer.com/
media/marksandspencer-youngminds.
Leading lingerie campaigns for
charity
M&S teamed up with Olympic champion Sir Chris
Hoy and Prostate Cancer UK to encourage more
men to check their risk of prostate cancer. As the UK
market leader in men’s underwear, M&S leveraged
the support of its customers and colleagues to
spark a nationwide conversation, prompting over
180,000 men to complete the online risk checker.
With £4 donated per pack of men’s Autograph
underwear, a total of £155,000 was raised for
Prostate Cancer UK during the campaign.
Additionally, during the year our Lingerie team
used insights from Breast Cancer Now (‘BCN’) in
its designs. BCN’s biannual insight report shared
scientific advancements and experiences from
individuals directly affected, helping to shape our
product design for the post-surgery range and
bra fit service.
£4.4m
raised for YoungMinds
PARTNERS
Why they are important to us
The ambition for International is to build a global
omnichannel business, which brings the magic of
M&S to customers around the world. Our franchise
and joint venture partners play a critical role in our
strategy, bringing invaluable market expertise.
What we heard and how
weresponded
Partner selling events
Our selling events for Womenswear, Menswear,
Lingerie and Kidswear, held three times a year
atour merchandising labs in White City and
Stratford, have consistently seen great
engagement. These in-person events have
facilitated numerous face-to-face discussions,
where senior leaders present business strategies
and upcoming seasonal campaigns. This year, our
first in-person Food event received excellent
feedback from partners. As a result, we have
made these twice a year, and with product
tastings and hearing more about what sets M&S
apart, partners are being bolder in buying a wider
selection of foods and buying into innovation.
International exchange programme
In February 2025, we hosted five franchise partner
colleagues at our Support Centre in London.
Thegoal was to provide our partners with
valuable insights from the UK business and give
the International team the opportunity to gain
local knowledge about key markets. During their
visit, our franchise partners shared their
perspectives, helping us to identify areas for
improvement. They also had the opportunity to
connect with customers and colleagues in UK
stores, fostering closer relationships and
enhancing collaboration.
Global strategic partner meeting
In March 2025, we hosted our first partner meeting
with our strategic franchise, wholesale and
marketplace partners. Held in Dubai, this enabled
all attending to see the M&S stores in Dubai. The
meeting was to lay out our International Reset for
Growth – with the CEO andleadership team
sharing insights on our transformation journey,
and opportunities forourInternational business.
Food convenience partner
conference
Our biannual Food Convenience Partner
Conference helps underpin our convenience
franchise partner strategy. To align with our new
retail operations programme, ‘One Best Way’,
which is delivering availability and productivity
benefits in Company-owned stores, partners were
invited to retail immersion events to support their
in-store strategy. Our conference helped deliver
trade plans, clarifying sale priorities and providing
focus areas for partnership stores. This year’s
support and guidance helped deliver over £100m
additional sales year on year, further creating an
opportunity to drive down cost for partners.
STAKEHOLDER ENGAGEMENT CONTINUED
S.172 Statement
The directors confirm that, during the year,
they have acted in good faith in a way that
best promotes the success of M&S for the
benefit of shareholders as a whole. In doing
so, they have had regard for the interests of
all M&S stakeholders, while preserving M&S’
reputation and ensuring our long-term
sustainability. Read our complete S.172
Statement on pages 68 to 70.
5
franchise partner colleagues hosted
atour London Support Centre
M&S Archive
M&S Archive, based in Leeds where our business
began, shares our unique heritage with a wide
range of customers and communities, and this
year responded to more customer enquiries
andprovided free online access to more archive
resources than ever before. Through ongoing
engagement with schools and focused teacher
consultation, the Archive met the need for
workshops to support children and young people
with special educational needs and disabilities
(SEND) by creating a new suite of learning
workshops. Pilot sessions earned glowing
feedback from students and teachers alike,
sothese specially designed sessions are now
available to more SEND groups.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 11
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS
Over the last three years, consistent execution has delivered
growth in sales, market share, margins, and return on
capital. As a result, the business has reduced net debt
byc.£900m and reinstated a dividend for shareholders.
M&S is in its best financial health for nearly 30 years.
This strong balance sheet enables us to continue to
invest to Reshape M&S, with capital expenditure of
c.£600m-£650m planned for the current year, net of
disposals. We have generated strong returns from our
store investments and are increasing the pace of store
rotation. The acquisition of Gist and changes to the
Fashion, Home & Beauty supply chain provide the
foundations to modernise the network and create
capacity for growth. Last year we started a multi-year
plan to upgrade our technology foundations and
increase digital capability. We are accelerating this plan,
making use of the recent disruption to reach our target
state more quickly.
Our strategy remains the same – to protect the magic
ofM&S, while modernising the rest.
Creating exceptional products
We aim to be the most trusted retailer, with quality products
at the heart of everything we do. M&S Food is broadening
its appeal by delivering a consistent drumbeat of innovation
and quality upgrades, while continuing to invest in
trusted value. We continue to progress towards being a
‘shopping list retailer’, focused on families, with the soul
of a fresh market.
Fashion, Home & Beauty’s commercial model of buying
more deeply into core lines, elevating quality, and increasing
style is resonating, attracting new customers. Market
share of both volume and value has increased in both
businesses, although opportunities remain for future
growth in underpenetrated categories and in Home & Beauty.
Driving profitable sales growth
Store rotation and renewal aims to create 420 bigger,
fresher Food stores and a more productive group of 180
Full Line stores, with half of the estate expected to be in
the renewal format by 2027/28. Returns on new and
renewed stores have been above our hurdle rates overall,
trading ahead of plan for three consecutive years. The
pace of new openings is being increased, securing sales
growth for the long term.
Online growth ambitions aim to increase the M&S.com
share of Fashion, Home & Beauty sales from 34% to 50%
inthe medium term. Online sales growth accelerated in
RESHAPING
FOR
GROWTH
At the October 2022 Capital Markets
Day, we set out the strategy of
reshaping M&S to deliver faster growth
and higher returns. Our objectives
included growing market share in both
UK businesses by 1% by 2027/28 and
targeting operating margins of over 4%
inFood and 10% in Fashion, Home &
Beauty, supported by structural cost
reductions of over £500m, disciplined
capital allocation and investment
within an envelope of £500-£600m
perannum.
Our strategic priorities
Create
exceptional
products
Drive
profitable
salesgrowth
Deliver
target
operating
margins
Build the M&S we need to be
2024/25 as marketing was rebalanced towards our social
channels and top tier partner brands were launched
online. Improvements to the website also supported
increased customer frequency. Our focus now turns to
improving the online offer,and experience, transforming
Fashion, Home & Beauty into a fully omnichannel
business with best-in-class delivery and returns.
International has store presence in 29 countries through a
series of strategic partnerships, which offer the potential
forglobal growth in the medium term. Recent trading
challenges, particularly in India, are being addressed under
new leadership. The International reset focuses oncapital
light growth, using the infrastructure of our franchise
partners in established markets, working withleading online
marketplaces, and identifying opportunities in wholesale.
This year, investmentin trusted value is planned and new
commercial arrangements will be established to
drivevolume.
Ocado Retail’s combination of M&S product and broad
choice supported by automated fulfilment, offers the
potential for a profitable route to market for online grocery
in the medium term. In 2024/25 active customer growth
and sales accelerated as Ocado Retail invested in value
and improved delivery service. However, the drop through
to profitability was disappointing. The near-term focus
includes improving the customer shopping experience and
optimising existing fulfilment centres todeliver increased
profitability and cash flow, before considering
investment in additional capacity. From 2025/26, the
results of Ocado Retail will be consolidated into M&S
Group reporting as technical control of the 50/50 joint
venture passes to M&S.
Delivering target operating
margins
Over the past three years the combination of driving
profitable sales growth through volume and structural
cost reductions across stores, the support centre and the
supply chain has enabled M&S to improve profitability
and has delivered operating margins of 5.4% in Food and
11.2% in Fashion, Home & Beauty, ahead of our targets.
This in turn has allowed the businesses to reinvest in
quality and value, further driving volume growth.
Structural cost reductions of c.£300m have been made
over the past three years, with £120m being delivered
in2024/25. More than half of last year’s savings were
generated in stores, through investment in technology
andimprovement in store processes.
Marks and Spencer Group plc Annual Report and Financial Statements 202512
STRATEGIC REPORTSTRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Food supply chain volumes have increased more than 11%
over the past three years putting pressure on operations.
This is being addressed through in-store processes, the
completion of forecasting, ordering and allocation
systems and partnering with strategic suppliers. The
acquisition of Gist has also delivered improved logistics
service and a contribution of more than £60m to profit
which provides the foundations for a long-term investment
to modernise the network and create efficient capacity
for growth. This year will see the first steps with
construction of a new depot near Bristol.
Fashion, Home & Beauty’s supply chain transformation
programme is still in its early stages, having taken initial
steps to consolidate the supply base and deliver cost
savings from investment in new warehouse capacity.
Under John Lyttle’s leadership, there will be increased
focus on restructuring the end-to-end operation, which
includes the adoption of a new merchandise and range
management system, increased automation in the
logistics network to support more profitable online
growth, and improving the resilience and flexibility of
thesupply base.
Continued simplification of store operations and the
support centre plus investments in automation and
efficiency provide scope for further cost savings.
Building the M&S we need
tobe
Reshaping M&S is underpinned by three programmes
which aim to create a high-performance customer-centric
culture, enable better decisions and service through
strong digital and technology foundations and deliver
value to shareholders through investment in growth,
combined with disciplined capital allocation.
We are creating a highly talented team who are close
tocustomers and front-line colleagues, taking accountability
for delivery and continuous improvement. This includes
identifying high-potential colleagues for leadership
development taking on bigger or broader roles in the
future. However there remains more to do to simplify
processes and reduce tasks for stores, to enable better
customer service.
In 2023, a strategic review of digital and technology was
initiated, which identified that although there had been
significant investment in digital applications and data
development, work was required to improve the tech
stack, reduce reliance on outsourcing and to integrate
better into the business areas. In early 2024, Rachel
Higham was recruited to lead Digital & Technology as a
member of the Executive Committee. At the Capital
Markets Day, we outlined the need for investment in
upgrading technology infrastructure which has over time
increased running costs and made processes complex
and inefficient.
In the light of the recent cyber incident, we are using the
disruption to bring forward investment, rephasing the
original programme, accelerating plans to upgrade
infrastructure and network connectivity, store and
colleague technology, and supply chain systems. This will
reduce the inter-dependency of systems and improve
operational resilience. Our overall aim remains the same,
to improve technology foundations, simplify infrastructure
and applications, to increase resilience further, and lower
technology run costs.
Strong balance sheet
andgrowing dividend
Our disciplined capital allocation and investment
framework prioritises investment in growth, alongside
free cash flow. Over the past three years the generation
of free cash flow, reduction in gross and net debt and
delivery of improved return on capital has in turn led to
an upgraded credit rating from both S&P and Moody’s.
A strong balance sheet enables additional investment
and we are increasing capital expenditure net of
disposals to c.£600m-£650m in 2025/26, of which
£200m-£250m will be invested in further improving
technology infrastructure, planned store maintenance
and upgrades to the logistics fleet and network. Growth
and cost-out investment is expected to be £400m-£450m,
which includes increased new store openings and supply
chain capacity. Investment will also be made in the new
Fashion, Home & Beauty planning platform which connects
all activities from buying to replenishment to deliver
ourcustomers an improved and personalised
shoppingexperience.
The improved performance and balance sheet give us
confidence in the prospects for medium-term growth,
and we are announcing an increase in the dividend of 20%.
This results in a proposed final dividend of 2.6 pence and a
full year dividend of 3.6 pence for 2024/25. We expect the
interim dividend for 2025/26 to be one third of the prior
year total. A strong balance sheet, cash flow performance,
and dividend cover allow for growth of returns to
shareholders in the medium term.
Update on cyber incident
As set out in the Company’s announcements on 22 and
26 April and 13 May 2025, M&S has been the subject of a
sophisticated cyber incident. We reacted swiftly to contain
the threat, working alongside external cyber security
experts to protect our data and systems. This included
mobilising our established Business Continuity and incident
management plans which are underpinned by an
experienced crisis and incident management team. Since
the incident, protecting our customers and the business
has been our main priority and at the same time we have
been progressively restoring our networks and systems
including the rebuilding of certain applications and file
systems where they were not recoverable. This work
isongoing.
In addition to restoring networks and systems, we are
accelerating the Digital & Technology transformation
plans, set out in our Capital Markets Day of November
2024 to reinforce our cyber defences and provide greater
resilience in the event of a subsequent attack.
Our estimate of the impact of the incident is very much
ongoing, however, based on our latest assessment
oftheexpected financial consequences, our current
expectation is an impact on Group profit of around
£300m for 2025/26, which will be reduced through
management of costs, insurance and other
tradingactions.
As previously announced, we have engaged a number
ofspecialist organisations to help us respond to the
incident and to assist with system restoration, as well
aswith wider network security. We expect to recognise
sizeable costs relating to the incident presented separately
as an adjusting item within with 28 March 2026 results.
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 13
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
SUSTAINS VOLUME
GROWTH WITH
CONSISTENT
INVESTMENT IN
QUALITY, VALUE
ANDINNOVATION
Food sales increased 8.7%, with like-for-like growth of
8.6%, driven by UK volume growth of 6.7%, with strong
growth in core categories. Market share was up 27bps
to3.9% for the 52 weeks to 23 March 2025. Adjusted
operating profit margin increased to 5.4% from 4.7%
dueto sustained volume growth, and with cost reduction
initiatives largely offsetting operating cost inflation.
Strategic KPIs:
Food
Market share increased to
3.9%
23/24: 3.7%
Perception for value
6
23/24: 2
Perception for quality
71
23/24: 69
Food
Marks and Spencer Group plc Annual Report and Financial Statements 202514
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Building a shopping list retailer
•
Prices were ‘dropped and locked’ on key shopping
list items such as salmon fillets and fresh soups and
Remarksable Value lines such as potatoes and tinned
tomatoes. This helped to increase customer perception
of M&S value for money to a ten year high, in an
increasingly promotional market.
•
Product quality was upgraded on over 1,000 lines such
as Indian meals, Gastro and Pizza as partners invested
in improved capabilities, widening the M&S quality
premium to peers. Sales of ‘Dine-In’ meals also grew, as
customers increasingly see M&S as a an alternative to
eating out.
•
More than 1,400 new lines were launched, creating a
consistent drumbeat of innovation during the year,
driving increased customer interest and frequency.
‘Viral’ product hits have included pistachio crème,
lemon hot cross buns and in-store bakery cookies.
•
As a result, larger basket shops grew 13% as customers
chose M&S for more of their everyday shopping.
New stores generating returns ahead
ofhurdle rates
•
During 2024/25 six Food stores and two Foodhalls in
Full Line stores opened. These averaged c.15,000 sq ft,
enabling more customers to shop the full range. In a
strong year, Food sales outperformed target by c.20%.
•
Nine new renewal stores and one extension traded
ahead of target, with renewal stores including
Chancery Lane and Fosse Park. Food sales in
Chancery Lane were up c.35% on previous levels.
•
A further nine Food stores and two extensions are
planned for 2025/26, including Fulham, Putney
andClapham.
Developing a trading model which
sustains growth
UK Food volumes have grown 11% over the past
threeyears, putting pressure on operations. This is
beingaddressed through a series of changes to create
amore modern, cost-effective flow of product.
•
Long-term supplier agreements are being
implemented across partner sites, with the aim to
increase this in 2025/26. This protects the ‘magic’ of M&S
Food enabling investment in upgrading capacity, while
generating savings which can be re-invested in quality
and value.
•
The roll out of the new forecasting and ordering system
was completed. This helps to better match supply to
variable demand, although there is further opportunity
for improvement.
•
The ‘One Best Way’ retail operations programme is
helping to improve productivity, reducing stock file
errors and making the new forecasting system
moreeffective.
•
Capacity constraints mean that many stores do not
receive their deliveries from the most efficient site.
Tosupport growth, work is underway on a new
multi-temperature depot in Bristol and to identify
asite foranew national distribution centre.
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 15
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
BECOMING A
DESTINATION FOR
QUALITY, VALUE
ANDSTYLE
Fashion, Home & Beauty sales increased 3.5%, with LFL
sales up 4.4%. Sales grew 4.7%, adjusted for theexit of
furniture in 2024. Market share was up 57 bps to 10.5% for
the 52 weeks to 30 March 2025. Adjusted operating profit
margin was above target at 11.2% compared with 10.7% last
year, as investments in digital and technology were partly
offset by improved sourcing and cost savings.
Strategic KPIs:
Fashion, Home
& Beauty
Market share increased to
10.5%
23/24: 10.0%
Perception for style
34%
23/24: 29%
Perception for value
45%
23/24: 43%
Fashion, Home & Beauty
Marks and Spencer Group plc Annual Report and Financial Statements 202516
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Increased style driving broader appeal
•
Perceptions of quality and value increased further and
remain market leading. M&S is now ranked second for
style compared with sixth in 2022.
•
Women’s and men’s grew in categories such as jeans,
knitwear and tops with strong seasonal campaigns and
collaborations helping to drive style perceptions.
•
Autograph sales grew 47% as customers invested in
higher quality, versatile products at the top end of the
range. Men’s Autograph sales of c.£200m compare with
just £50m three years ago.
•
In a declining kidswear market, there was growth in
baby and market share growth in kids casual. A ‘first
price, right price’ approach is being implemented,
removing promotions and offering competitive prices
on everyday essentials.
•
Home saw good growth in collaborations such as Kelly
Hoppen, and beauty grew own brand fragrance sales.
Both offer significant potential for long-term growth
and are being refocused under new leadership.
Early improvements to online but
further improvement required
•
Online sales, adjusted for the exit of furniture represented
34% of sales. Growth was driven by active customer
growth of 9% to 10.2m, as marketing was refocused
towards brand and social channels.
•
Improvements to the offer included upgraded imagery,
navigation and availability in smaller sizes.
•
Partner brand fashion sales online increased 42%.
Recent top tier brand additions have included Hush,
Tommy Hilfiger and Calvin Klein. The overall brands
business exceeded £200m sales for the first time
in2024/25.
•
There remains a lot more to do to create a market-leading
online business. Further work is needed in planning,
ranging, in-store selling, delivery and fulfilment to
drive online towards an ambition of 50% ofFashion,
Home & Beauty sales in the medium term.
New Full Line stores generating returns
ahead of hurdle rates
•
During 2024/25 two new Full Line stores at Dundee and
Washington Galleries opened with their Fashion, Home
& Beauty sales trading 15% ahead of plan. Fosse Park
was extended during the year, with Fashion, Home &
Beauty trading up 20% versus last year.
•
The Battersea Fashion only trial store opened in
December 2024, generating strong customer and
partner interest and will provide inspiration for future
renewal stores, including The Pantheon on Oxford Street.
•
Two Full Line flagships are planned for 2025/26. They
are the relocation of Bath and the opening of Bristol
Cabot Circus.
STRATEGIC PROGRESS CONTINUED
Increasing focus on operational
efficiency
As product appeal increases in Fashion, Home & Beauty,
the business remains constrained by its legacy supply
chain and outdated processes with the programme to
modernise the supply chain in its very early stages.
JohnLyttle will increase the focus on execution in 2025/26.
•
Creating long-term sourcing partnerships. This will
enable investment in capacity and capability for future
growth and help capitalise on emerging opportunities
to find new sources of supply.
•
Implementing a new planning platform to link all
buying activities from budgeting to replenishment,
removing duplicative manual activities.
•
Investing in efficient storage and automation in the
logistics network. This will increase capacity to serve
online orders, improve service and reduce costs.
•
A focus on better in-store processes, identifying and
removing unnecessary tasks to mitigate the impact of
increased costs in a flat market for store sales.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 17
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
RESETTING AND
REFOCUSING FOR
GROWTH
The ambition for International is to build a global
omnichannel business, which brings the magic of M&S
tocustomers around the world. Utilising the expertise
and infrastructure of strategic franchise partners in
established markets, working with leading marketplaces
to drive online growth, and securing new opportunities
inwholesale.
International
Marks and Spencer Group plc Annual Report and Financial Statements 202518
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS