British Retail Giant Marks & Spencer Warns Of Economic Challenges Despite Strong Sales Growth In Food And Retail

London based multinational retailer, Marks and Spencer Group MAKSY has cautioned about the economic climate, citing uncertainties regarding growth, inflation, and interest rates.

The company also said its business faces rising costs due to well-documented tax increases.

“The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control,” said CEO Stuart Machin. 

The warning comes even after the company reported sales of £4.06 billion for the third quarter, up 5.6% compared with the year-earlier period.

In her first budget as U.K. Treasury Chief last October, Rachel Reeves raised the national living wage and increased employers’ national insurance contributions, adding additional costs for businesses, according to a report from the Wall Street Journal.

The company reported strong growth in food sales, with an 8.7% increase, driven by an 8.9% rise in like-for-like sales. Clothing, Home & Beauty segment grew 1%.

The retailer reported M&S sustained UK volume growth of 6.6% from the first half into the Christmas trading period, driven by increased customer numbers and transactions.

Core categories, including meat, produce, grocery, and in-store bakery, saw double-digit growth, with customers increasingly turning to M&S for their everyday shopping.

“Sales records were broken across the business, with Food recording its biggest day and Clothing, Home & Beauty online its biggest week, but we're not complacent – as a growth business it's our job to break records,” remarked Machin.

International sales, however, showed a decline of 2.8% due to ongoing challenges in the Indian market and delays in franchise shipments.

Price Action: MAKSY shares closed at $9.34 on Wednesday.

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