Marks and Spencer says it has arrested the decline in its food business despite announcing the closure of a further 25 food stores.
The supermarket’s annual report revealed revenue and pre-tax profit losses for the company, which the business ascribed to its ongoing transformation plan.
Full year pre-tax profits for the company fell ten per cent on the previous year to £523.2million, while profit after tax rose to £37.3m.
In its food business, the company said there were “good signs of progress” after revenue decline 0.6 per cent, with like-for-like revenue down 2.3 per cent, which they attributed to the timing of Easter at the start and end of the financial year.
The company reported that when adjusted for Easter timings its food sales improved in the second half of the year, even showing fourth quarter growth.
The report stated: “Our Food brand remains very strong and our strategy is to protect the magic which is based on our unique quality, freshness, and innovation credentials whilst reshaping our store estate, infrastructure, operating systems, cost management and supply relationships."
The company outlined the first phase of its food turnaround as “addressing the basic operating weaknesses in the business and broadening our appeal”.
The report stated M&S has nearly halved its dependence on short term promotions and complex multi-buy offers, reducing promotional participation by 10 per cent over the year.
The retailer also admitted that its food waste levels were among the highest in the industry without significant improvements recently, although highlighted the change its supply chain overhaul, dubbed Project Fuse, will bring about.
Chief executive, Steve Rowe, said: “We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face. As I have said, at this stage we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead.
“Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business. M&S is changing faster than at any time in my career - substantial changes across the business to our processes, ranges and operations and this has constrained this year’s performance, particularly in Clothing & Home. However, we remain on track with our transformation and are now well on the road to making M&S special again.”