By Fatma Younis
Marks & Spencer chief executive Stuart Machin has accused the Labour government of delivering "one of the biggest tax grabs in history" following last week's autumn Budget. Machin said the retailer faces an "onslaught of costs" from the fiscal measures announced by Chancellor John Healey.
Budget measures increase costs
Machin said that despite positive headlines on business rates, the changes will add £10 million to M&S's business rates bill. The company has already absorbed around £35 million in higher packaging taxes for the year and expects further increases in pay and national insurance costs. Additional costs stem from Middle East disruption linked to the Iran war. Since the 2024 budget, M&S has faced roughly £150 million in extra costs from taxes and higher labour expenses.
Profit and sales performance
Despite the cost pressures, M&S reported adjusted pre-tax profits of £403.2 million for the 26 weeks to September 26, more than double the £184.1 million a year earlier. However, profits were lower than the same period in 2024 due to weaker fashion, home and beauty earnings and higher costs. Total sales rose 16.2% to £9.25 billion. Food sales jumped 13.9%, driven by an 11.9% increase in volume sales and new store openings. Fashion, home and beauty sales grew 17.5% year on year, aided by online recovery after a cyber attack last year.
Cyber attack aftermath and outlook
The retailer said its fashion, home and beauty division still suffers from the "long-tail impact" of a cyber attack that halted online sales for six weeks around Easter 2025. Store sales were also affected by an extended period of hot weather over the summer. Machin said the company is cautious about recruitment as it manages employment costs and fragile consumer sentiment, but added that M&S enters the second half in a strong position with solid October performance.
