May 25, 2022
M&S warns consumer squeeze will hit profit growth
Retailer Marks and Spencer has warned that the financial squeeze on UK consumers will hit its profit growth this year. Sales growth at the venture will be in the "Mid-single digits" this year, down from the 10 per cent it had previously indicated, as rising energy costs take their toll. The lower-than-expected profits from Ocado, the absence of £102mn of Russian sales and a lack of relief on business rates in the UK meant M&S has started the current financial year at a "Lower adjusted profit base". "Given the increasing cost pressures and consumer uncertainty we do not currently expect to progress from this lower profit base in 2022/23," the retailer warned. M&S booked a profit of £13.9mn from Ocado Retail last year, itself a steep drop from the £78.4mn during the previous year, when Ocado benefited from a big shift to online grocery during the pandemic.
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