ONLINE ONLINE ONLINE......10 Nov 2021 18:04
SOME THINGS TO NOTE FROM M AND S UPDATE TODAY....
M&S eyes £500m profits boom after surge in demand for jeans and workwear
"Transformation and Covid Bounce Back Drives Strong Performance"
? MS2 driving strong online growth, record active customers and increased retention
? International rebounding despite lockdowns, trading restrictions and EU border costs
The Clothing & Home business delivered 17.3% growth in full price sales helping to drive a healthy improvement in operating profit before adjusting items. (GOOD NEWS FOR DEBENHAMS)
International focused on strong trading partnerships and global online
The International business has also grown online sales, both in markets with M&S stores and on marketplaces. In addition, we have seen a solid recovery in Clothing & Home sales while managing the headwinds of lockdown and restrictions in India plus the impact of EU border costs, primarily affecting Food. Despite these headwinds, International made a solid contribution to group results.
? C&H online sales1 growth of 60.8%, now 34.4% of total C&H sales. Store sales down 17.6%
The pandemic has driven a substantial step up in the penetration of online grocery sales from c.7% of market demand pre-Covid to over 12% today. In the medium term this will create significant growth opportunities for Ocado Retail as it is able to use the superior service and range driven by the CFC model to attract customers newly familiar with online ordering.
Clothing & Home delivered a substantial improvement in profitability with sales down just 1.0% compared with 2019/20 despite lockdown extending into week one of the period. Sales grew in Q2 and overall full price sales were up 17.3% for the period.
MS2 delivered strong online growth, with sales up 60.8% vs 2019/20 and 19.7% compared with last year. Online market share increased 1.1 percentage points compared to 2019/20 in the 12 weeks to 19 September. Online sales represented 34% of Clothing & Home sales in the period, well on the way to our target of over 40%. Online active customers have increased by 60.0% over two years to 9.6m and retention rates are higher than before the pandemic, creating an expanded opportunity for growth.
Store sales declined 17.6% compared with 2019/20. The 'legacy' store base meant that the business remained impacted by the enduring weakness of city centre and high street trade. Stores on retail parks were level on 2019/20, while our stores in city centres declined by 32.1%. Nevertheless, store market share was up 0.8 percentage points in the 12 weeks to 19 September. (CITY CENTRE AND HIGHSTREET ARE FINISHED!!)
MS2 continues to progress and drive strong results for the online business. We have one of the largest active online customer bases in the UK and an opportunity to drive sales through increased frequency, recency and spend. We aim to achieve well over 40% of Clothing & Home sales through online in three years compared with 34% in H1.
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