By Ahmed Abdelsalam
Marks & Spencer chief executive Stuart Machin has accused the Labour government of orchestrating one of the “biggest tax grabs in history” after the autumn Budget pushed the retailer’s costs sharply higher, even as half-year profits more than doubled.
Profits Double Amid Revival
Adjusted pre-tax profit rose to £403.2 million for the 26 weeks to September 26, up from £184.1 million a year earlier, though still below the same period in 2024. Total sales climbed 16.2% to £9.25 billion, driven by strong food performance and a recovery in online fashion sales following last year’s cyber attack.
Budget Adds £10m to Business Rates
Machin said Chancellor John Healey’s first Budget was a “whole lot of nothing” for businesses. Despite positive headlines on business rates, M&S faces an additional £10 million on its rates bill. The company estimates it has absorbed around £35 million in packaging tax increases this year and roughly £150 million in extra costs from taxes and higher labour expenses since the 2024 budget.
Food Growth Offsets Fashion Weakness
Food sales jumped 13.9%, with volume sales up 11.9%, benefiting from store openings and investment. However, the fashion, home and beauty division fell short of its potential, with profits still impacted by the long-tail effects of the cyber incident and a summer of unusually hot weather that dented store traffic.
Cyber Attack Aftermath Lingers
Last year’s Easter cyber attack forced M&S to halt online sales for about six weeks and left shelves empty. While online fashion sales have rebounded, product availability disruptions continue to weigh on the non-food business. Machin said the company remains cautious on recruitment as it navigates higher employment costs and fragile consumer sentiment.
