Controversial: But M&S’s Christmas ads, which starred Hannah Waddingham, paid off
Marks & Spencer is winning the battle of the food aisles as figures show the revitalised retailer was the best-performing grocer in the run-up to Christmas.
The High Street stalwart has been on a roll since chief executive Stuart Machin and chairman Archie Norman led a recovery that has seen its share price more than double in the past year, which propelled M&S back into the FTSE 100 index of leading companies after a four-year absence.
The store’s Christmas advert featuring celebrities such as actress Hannah Waddingham and pop singer Sophie Ellis-Bextor caused a stir after they were seen destroying a number of traditional festive items, including a gingerbread house and paper crowns.
But the controversial campaign has paid off, according to unpublished data from retail experts Kantar seen by the Mail on Sunday and analysed by a leading City investment firm.
This shows that in the crucial four weeks to Christmas Eve, grocery sales at M&S leapt by 14.2 per cent compared with the same period the previous year.
That was slightly more than the combined growth of the German-owned discounters Aldi and Lidl, which between them notched up a 14.1 per cent increase.
Overall, shoppers spent a record £13.7 billion on their Christmas groceries. That pushed average household spending to an all-time high of £477, Kantar said.
Other winners included Sainsbury’s – where sales were 9.5 per cent higher – and budget retailer B&M, up 7.4 per cent over the same period. They were the only other retailers to outperform the average market growth of 7.1 per cent seen across the sector as Christmas approached, the data showed.
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The worst performer was Ocado, where sales grew by a mere 0.5 per cent. The online retailer has a joint venture with M&S.
Archie Norman, the M&S chairman, has said he is ‘not happy’ with the joint venture’s performance and said there was ‘work to do’ to improve the loss-making partnership. The deal, struck in 2019 and worth as much as £750 million, replaced a previous tie-up between Ocado and Waitrose. M&S reportedly added nearly 600 products to Ocado’s website before Christmas.
More details on how the joint venture is going are expected when M&S and Ocado update investors on trading in the next few days.
Analysts at investment bank Jefferies say results from M&S will ‘reflect its renewed strength’.
They expect double-digit percentage sales growth in the three months to December – fuelled by food, its biggest business – with M&S on track to post full-year profits of £705 million, versus £482 million in the previous year.
But the Kantar figures seen by The Mail on Sunday make grim reading for Morrisons and Asda.
They were saddled with debt after private equity groups bought both firms just before the grocery market was hit by soaring energy costs and interest rates rocketed.
Morrisons, which buy-out firm CD&R acquired for £7 billion, saw its sales nudge just 2.1 per cent higher in the month before Christmas. Asda fared better, with sales up 5.1 per cent but still lagging the wider market. Its private equity owner TDR Capital is due to give evidence to MPs on Tuesday about its debt-fuelled takeover, which left Asda still nursing debts of £4.2 billion, excluding rent.
Co-owner Mohsin Issa insisted before the Business and Trade select committee last month that he was best person to run Asda while the 18-month hunt for a chief executive continues.
