M&S food makes good start to new financial year, says boss

LONDON (Reuters) -British retailer Marks & Spencer’s food business has made “a good start” to its 2023-24 financial year, the group’s boss told investors on Tuesday.

Chief Executive Stuart Machin said M&S took a 130 basis points hit to its food margin in the year ended April 1 as it decided not to pass on to customers the full impact of cost inflation. The group grew food sales 8.7% over the year.

“That has given us a good start by the way into this year,” he said at the retailer’s annual shareholders’ meeting, which was held virtually for a fourth straight year.

Machin cautioned that food prices won’t come down as quickly as they went up.

“I’m slightly worried about deflation, because it’s not going to come down as quick as the inflation,” he said.

“Now we’re tracking that really carefully and trying to pass that on as well to customers.”

M&S is Britain’s fastest growing food retailer after discounters Aldi and Lidl, according to the latest data from market researcher NIQ. Its shares are up 56% so far this year.

Separately on Tuesday, Sainsbury’s, Britain’s second largest grocer, said food inflation was falling.

M&S chairman Archie Norman said the board would think again about holding virtual-only annual general meetings after a backlash from some investors who want to attend in person.

“The question I know people are asking is: ‘Why can’t I come along physically and look the chairman eye to eye and buttonhole him,’ I don’t think that’s unreasonable,” he said.

“We’re going to have to think about how we get the best of both worlds.”

(Reporting by James DaveyEditing by William James and Mark Potter)