Marks and Spencer has released its half year results for 26 weeks ended 29 September 2018, showing profit - before tax and adjusting items - rose by 2% as a result of the phasing of costs.
For the period, adjusting items stood at £96.8m, including £47.6m for UK store closure programme.
Food revenue fell by 0.2%, with like-for-like revenue down 2.9%, reflecting tough trading conditions. Revenue was also adversely impacted by the timing of Easter and by the actions M&S is taking to restore 'trusted value'. These include reducing prices and removing complex and confusing promotions. Although the group is starting to reshape the ranges and tackle the weakness in our supply chain, waste and availability remain worse than market comparator levels.
M&S opened 22 new Food stores in the period, the benefit from which was partly offset by full-line closures.
The firm is in the early stages of reengineering its food categories and development pipeline to broaden appeal and frequency of shop.
Over recent years the business has become excessively dependent on both short-term promotions and complex and confusing multi-buys, including the profit dilutive 'Dine In' programme. M&S has already reduced the prices of over 100 everyday lines with many more to go.
CEO Steve Rowe (pictured) said, “In May, I set out in our 'Facing the Facts' presentation, the challenges we face and the steps we are taking in this the first phase of our transformation programme. Against the background of profound structural change in our industry, we are leaving no stone unturned and reshaping our business, its organisation and culture.
“This phase is about rebuilding the foundations of the future M&S and we are judging progress as much by the pace of change as the trading outcomes. Already, we have reorganised into a family of strong businesses in the biggest change to our structure for decades. We now have a largely new, very determined and energetic management team in place. M&S is becoming a faster, more commercial and more digital business.
“We are on track to restructure our store portfolio with over 100 full-line closures and expect to see newly remodelled stores open next year. We are fixing the basics of our online channel and there are very early signs of improvement. Every aspect of our ranges, how we trade, our supply chain and marketing is undergoing scrutiny and change.“