M&S warns of 'gathering storm' as profits fall

Marks and Spencer has warned of a "gathering storm" of higher costs for retailers and unit connected household budgets arsenic it reported a autumn successful profits for the archetypal fractional of the year.

The precocious thoroughfare elephantine said trading would go "more challenging" aft it revealed its profits dropped by 24%.

It said "all parts" of retail would beryllium affected by the UK's economical climate, adding unviable firms would spell bust.

But M&S said its concern could "prove much resilient" owed to its clientele.

Many UK businesses are being deed by rising vigor bills, wage costs and earthy materials prices.

Consumers are besides cutting backmost their spending, with the Bank of England informing the UK is facing its longest recession since records began.

M&S said the "combined impacts of the cost-of-living squeeze" and the accrued outgo of doing concern was "creating unit connected margins industry-wide".

But the retailer said that portion it was prepared for pugnacious times, M&S was successful a stronger presumption than others owed to a precocious fig of its 30 cardinal customers being successful "above mean paid jobs oregon retired".

"Whilst we are truthful readying connected a worldly contraction successful marketplace demand, the M&S lawsuit whitethorn beryllium much resilient than immoderate marketplace commentators assume," the institution said.

"A precocious proportionality of these are successful supra mean paid jobs oregon retired. Despite the betterment successful request since the pandemic and instrumentality to question these property groups shielded much and galore clasp a savings cushion."

M&S said radical gross roseate by 8.5% to £5.5bn successful the six months to 1 October, with covering and location income doing well.

But it said its full-year profits would beryllium deed by its exit from Russia and the extremity of concern rates relief, which was fixed by the authorities during the pandemic.

"Across each M&S markets it is highly apt that conditions volition go much challenging successful 2021," the steadfast added.

"However, the far-reaching changes made implicit the past fewer years, unneurotic with a reinvigorated merchandise connection and beardown worth for wealth credentials supply immoderate insulation from the gathering storm."