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Profits at Marks & Spencer more than doubled over the past six months, the retailer revealed on Wednesday, as the business continues its revival following last year’s cyber attack.
But the high street giant cautioned it faces an “onslaught of costs”, and its boss has accused the Labour Government of one of the “biggest tax grabs in history”.
Stuart Machin, chief executive of M&S, said the autumn Budget last week was a “whole lot of nothing” and will lead to tax hikes for the firm.
Chancellor John Healey unveiled his first Budget last week, promising support for millions of households and tax support for many high street firms to protect British workers and businesses from the economic impact of the Iran war.
M&S said its business costs have been pushed higher due to policies from the Budget.
Mr Machin said: “Even the headlines on business rates sounded positive, but it actually adds another £10 million to our business rates bill.
“If you look at the last three budgets, I can’t think of another time like it. It’s one of the biggest tax grabs in history that I have seen.”
The company said it has swallowed around £35 million of costs from increases to packaging taxes for the year.
Higher pay and national insurance costs will also hit the business, along with costs linked to disruption in the Middle East.
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M&S said it has faced around £150 million of extra costs from taxes and higher labour costs since the 2024 budget.
Mr Machin added that the company is “cautious about recruitment” as it manages hiring employment costs and fragile consumer sentiment.
The retailer has been buoyed by strong growth across its food business, which is performing “ahead” of plan.
But Mr Machin said results from its fashion, home and beauty business “fell short of their potential”, despite bouncing back from the impact of the cyber attack.
Bosses said recent sales and profits from the fashion, home and beauty arm were still impacted by disruption to product availability due to the “long-tail impact” of the cyber incident.
Store sales were also partly knocked by the long period of hot weather over the summer.
Last year, the retailer stopped all online sales on its website for around six weeks and suffered empty shelves after hackers targeted the business around the Easter weekend, causing disruption to its logistics systems.
On Wednesday, the company revealed adjusted pre-tax profits lifted to £403.2 million for the 26 weeks to September 26, compared with £184.1 million a year earlier.
However, this was lower than the same period in 2024, amid an impact from weaker fashion, home and beauty profits and higher costs.
“Despite the onslaught of cost headwinds, we have remained focused on our ambitions and we are clear on our plan,” said Mr Machin.
“We enter the second half in a strong position, with a solid performance in October under our belts.” Sales at M&S lifted by 16.2% to £9.25 billion for the half-year to September.
Its food operation reported a 13.9% jump in sales, benefiting from an 11.9% rise in volume sales as well as store openings and investments.
Fashion, home and beauty sales increased by 17.5% year on year, supported by the online recovery following the cyber attack.
