Tesco has done a stellar job defending market share while the discounters nip at its heels. Investing in low prices, price matching and Clubcard pricing has helped to stem the tide of shoppers switching to Aldi and Lidl.
M&S, whose results came out after the interview, does indeed appear to be the Christmas winner. Non-food performed better than expected. Q3 LFLs +8.1% (food +9.9% / non-food +4.8%). They also reported their highest full price market share in clothing/home for over a decade. Abstaining from the Black Friday frenzy appears to have paid off.
M&S said it's entering 2024 with a "spring in their step" but, like competitor Next, they flagged wage and business rates related cost inflation as challenges over the next 12 months. Also worth calling out here that Next, Ikea and, just yesterday, Sainsburys called out the attacks on container ships in the Red Sea as potentially delaying stock getting to the UK (by up to 2.5 weeks) which, if it continued, could result in higher prices.
But back to M&S which continues to go from strength to strength. Archie Norman and Stuart Machin have turned the supertanker around with a renewed focus on product, digital transformation and a stronger sense of identity. This customer-centric strategy is now paying dividends despite the challenging climate.
Also worth highlighting that M&S has benefited from:
💳 Their core customer (more mature/affluent) has been broadly shielded from the economic pressures faced by many consumers.
🦖 Struggling/disappearing rivals means they've been able to easily scoop up trade. Retail Darwinism!
#marksandspencer #tesco #christmastrading #retail #supermarkets #retailinsights
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