M&S and Tesco Praise Strong Christmas Performance, But Stocks Fall – Business Live | Business

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Marks and Spencer store on Oxford Street Photo: Henry Nichols/Reuters

Good morning, and welcome to our renewed coverage of the global economy, financial markets, the eurozone, and business.

Marks & Spencer hailed a strong Christmas as the UK retailer’s turnaround strategy begins to bear fruit….. as supermarket chain Tesco upgrades its profit outlook.

UK M&S sales jumped 8.9% last quarter, compared to pre-pandemic levels two years ago, a trade update just released shows.

In the last 13 weeks of 2021, food sales were up 12.4% compared to the last quarter of 2019, with M&S’s Retail Parks and Simply Food Stores “continuing to outperform.”

Basket sizes increased, as customers used Marks & Spencer for more of their daily shopping—perhaps to buy more fine foods to celebrate Christmas after a tough year.

Apparel and home sales, which have long been a problem for Marks & Spencer, are up 3.2% compared to the past two years.

Photo: Marks and Spencer

M&S says it is now “more confident” it will meet its latest updated earnings forecast of £500m – unless new financial restrictions or shutdowns are imposed.

M&S CEO Steve Rowe said:

“Trade during the Christmas period was strong, which is indicative of the continuous improvements we made to product and value. Apparel and Home delivered growth for the second consecutive quarter, supported by strong growth in online and full-priced sales. Food maintained its momentum, outperforming the market over 12 and 24 months.

The market continues to be affected by the headwinds and tailwinds we reported in the first half, but I remain encouraged that our turnaround plan is now driving performance improvement.”

In what retail analysts call Super Friday, Tesco raised its earnings forecast, reporting strong sales at supermarkets and retail outlets, with online sales well ahead of pre-COVID levels.

The UK’s largest supermarket reported a surge in Christmas sales, and announced that its market share is now the highest in four years.

Tesco’s UK sales similarly rose 0.3% year-over-year over the Christmas period, and were 8.8% higher than they were two years ago – illustrating how grocery sales have benefited from the pandemic.

Photo: Tesco

Tesco says it now expects retail operating profit to be slightly higher than its previous guidance, after stronger-than-expected sales this year.

Ken Murphy, CEO of Tesco says:

“We are so glad we were able to help our customers have an amazing birthday.

Despite increasing cost pressures and industry supply chain challenges, we have continued to invest to protect availability, redouble our commitment to deliver significant value and deliver our most powerful festive collection ever.

We have put this in a strong position to meet the needs of customers, once again, COVID-19 has led to a greater focus on partying at home. As a result, we have outperformed the market, increased our market share and strengthened our valuable position.

ASOS and Card Factory are also reporting results (we’ll get to them soon…)

Yesterday, supermarket group J Sainsbury, sportswear/fashion company JD Sports and homeware chain Dunelm alo raised their earnings forecasts.

Today we also get the latest US unemployment figures, which may show Omicron’s impact on the US labor market.

The British Office for National Statistics releases its weekly health check on the UK economy, which covers indoor dining, shop shortages, credit card spending and gas prices (among other indicators)

European stock markets are preparing for a quiet start, after US inflation reached its highest level since 1982 yesterday.

Jeremy Naylor (@JeremyNaylor_IG)

#Thursday mkts: Europe is expected to open lower, yesterday #FTSE100 near a two-year high. #USD continues to decline, 11 weeks low against #GBPP. # Gold again. # Oil dropped from a height of 2m. # Wood is 7 months high. Today’s earnings from #TSCO #MKS #ASC #HFD. #EarlyMorningCall 07:30 AM – https://t.co/B1fxa2jESa pic.twitter.com/kPefTCa92o

January 13, 2022 Michael Hewson 🇬🇧 (@mhewson_CMC)

European markets brace for pause after weak US end https://t.co/KxRHpZoBzmCMCMarkets

Jan 13, 2022 Agenda 9.30am GMT: UK Weekly Business Insights and Economic Activity Data 1.30pm GMT: US Weekly Unemployment Numbers 3pm GMT: Senate hearing of Federal Reserve Governor Lael Brainard on her nomination Vice Chairman of the Federal Reserve
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