Marks and Spencer Food Division Shows Resilience Despite Easter Cyber Attack Slowdown

Sales growth in Marks and Spencer’s food division has experienced a deceleration over the past quarter as the retailer grappled with the aftermath of a devastating cyber attack. The FTSE 100 company reported a 9.1 per cent year-on-year increase in food sales during the 12 weeks leading to 14 June, according to data from NielsenIQ.

The growth rate marks a notable decline from the previous period’s 10.8 per cent and the earlier quarter’s 14.7 per cent expansion, reflecting the significant impact of April’s cyber breach. Despite these challenges, M&S managed to secure a modest market share increase of ten basis points, reaching 3.7 per cent year-on-year, though this represents a slight retreat from the 3.8 per cent recorded in the previous month.

The Easter weekend cyber attack initially disrupted the retailer’s online services, including click and collect and contactless payment systems. The impact forced M&S to suspend online orders for nearly two months, affecting both food and clothing deliveries. The disruption led to reduced food availability and increased waste and logistics costs, with the company estimating a £300 million hit to profits, though it expects to recover £100 million through insurance claims.

Shore Capital’s analyst Clive Black praised the retailer’s performance, noting “commendable momentum” despite the setbacks. The company has since restored its operations, with online clothing orders resuming on 10 June after a 46-day hiatus.

The broader market data from NielsenIQ aligned with Kantar’s recent findings, showing strong performances from market leader Tesco and runner-up Sainsbury’s. Total till sales growth increased by 3.8 per cent in the past four weeks, up from 3 per cent in the previous month, boosted by favourable weather conditions encouraging outdoor dining.

M&S remains optimistic about its recovery, with a spokesperson highlighting the launch of over 200 new and upgraded product lines in their foodhalls over the past fortnight, aimed at attracting both new and existing customers to drive long-term market share growth.