M&S CEO Rejects Government Food Price Cap Proposal

Chief executive Stuart Machin called the UK government’s voluntary price-cap scheme for essential food items “completely preposterous”. He said the proposal, intended to curb food-price inflation by mandating a low-priced version of staples, adds to existing pressures on retailers and should be replaced by tax and regulatory relief.

The Guardian

Officials proposed that supermarkets stock at least one version of basic products—bread, milk or butter—at a set low price, in exchange for easing regulations on packaging rules and standards for healthier food.

The Guardian

Machin warned that retailers face a “triple whammy” of higher taxes, tighter regulation and global conflict, saying the added costs affect employment and that the coming year is “one of the most important … in our history”. Chair Archie Norman urged the firm to “shake the dust off our heels” as disruptions ease. CFO Alison Dolan said the cyber incident “materially disrupted” stock flow, leading to inventory discounts. Machin added that Middle East conflict added a few million pounds to costs, but most tax changes were anticipated and cost-saving measures were planned.

The Guardian

Underlying profit fell 23.8% to £671 million for the year to 28 March, while total sales rose 1.9% to £14.2 billion despite inflation above 3%. Food sales grew 7%, raising M&S’s market share to 4.1% (4.6% including Ocado sales). Cyber-related costs totalled £131.3 million, and stock-flow disruptions forced inventory discounts. The Ocado joint venture sold £1 billion of goods, contributing to its £15.2 million operating profit. M&S argues that price caps would add to higher fuel, freight and input costs already pressuring consumer prices.

The Guardian

Machin contended that government should not “try to run business” and should instead “understand business better”. He suggested that lowering taxes and easing regulations would be a less distorting way to protect consumers.

The Guardian

Analysts at Jefferies forecast annual profit of £964 million, while M&S guidance projects profit above £876 million, a gap of roughly £88 million between market expectations and the retailer’s outlook.

The Guardian

• “completely preposterous” — Stuart Machin, CEO, Marks & Spencer

The Guardian

• “I don’t think government should be trying to run business,” — Stuart Machin, CEO, Marks & Spencer

The Guardian

• “a triple whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict” — Stuart Machin, CEO, Marks & Spencer

The Guardian

• “shake the dust off our heels” — Archie Norman, Chair, Marks & Spencer

The Guardian

• “materially disrupted” — Alison Dolan, CFO, Marks & Spencer

The Guardian

M&S will invest in technology, open 18 new food stores, add automated distribution centres, refurbish clothing departments and use AI for marketing and product sourcing. Machin said the next three years are critical for growth.

The Guardian