M&S boss bemoans last week’s budget as ‘whole lot of nothing’

The chief executive of Marks & Spencer has called John Healey’s first budget as chancellor a “whole lot of nothing” and bemoaned an “onslaught of taxation and regulation” from the Labour government, despite welcoming an expected deal on EU border checks.

Stuart Machin said he was disappointed at last week’s budget statement, adding that it “didn’t really address the issues we need to focus on growth”. He said the chancellor’s “real terms” freeze on business rates, for example, would lead to an additional £10m on M&S’s existing £170m rates bill.

Machin also criticised plans for the “most ridiculous” deposit return scheme under which retailers must install machines for the return of cans and plastic bottles in stores in England and Scotland from next October in order to drive up recycling rates. In Wales, the scheme is to also include glass bottles.

The M&S boss said he was “very supportive” of a new food trade deal between the UK and EU, which is expected to be completed later this month. Machin said this would help reduce a £10m post-Brexit hit to the retailer caused by the paperwork, packaging and logistical costs involved in sending goods to the Republic of Ireland and Northern Ireland. He added that the deal would also help UK exports of food to mainland Europe.

The comments emerged as M&S said a sustained cyber-attack that forced it to shut down its website last year had continued to hurt clothing sales over the past summer.

The retailer said profits bounced back to a better-than-expected £355m in the six months to 26 September from only £3.4m a year before, as it partly recovered from the hack. The attack, which began over Easter 2025, forced M&S to shut its website, which sells clothing and homewares, for more than six weeks.

Total sales over the half year across the food to fashion group rose 16.2% to £9.2bn.

M&S said sales and profit from its clothing and homewares arm remained below that of two years ago as “availability was constrained due to the longer-than-expected impact of manual ordering processes following the incident, while profitability was diluted by an increased mix of online sales, which have higher fulfilment costs”.

The retailer has previously explained that its team of buyers had to calculate demand and make orders to suppliers without the help of their usual technology and detailed information last year.

Machin said: “We are broadening our appeal and the brand is in good health, but the results fell short of their potential and show there is a lot more to do.”

He added that the manual ordering meant that in some clothing categories M&S did not stock enough everyday products, such as denim and knitwear, over the summer. Profits were also hit by more people shopping online during the “long hot summer”.

Machin said the impact of the cyber-attack “lasted longer than we expected”, but added: “That’s now behind us.”

M&S said it had been able to take its biggest ever share of a declining clothing market despite the availability problems, which were now resolved, but added: “Market conditions remain challenging.”

Machin said the UK clothing market was down by 11%, with £1bn in clothing sales lost across the industry in the last six months as the hot weather, low consumer confidence and a shift away from spending on nonessentials hit sales.

He added that the industry was still “heavily discounting” and M&S was trying to avoid that trend by pricing its goods affordably.

Clothing, beauty and homewares sales rose 17.5% to almost £2bn in the half year compared with the same period last year, which was affected by the hack.

Performance is expected to improve in the second half as M&S said availability has now recovered “creating a better balance between core and seasonal stock”.

Its food business powered ahead, increasing sales by almost 14% to £5.2bn in the half year as it opened seven new stores and expanded or refurbished others.

The group’s Ocado joint venture also swung to a half-year profit of £25.6m from a loss of £3.1m a year before as sales rose 16% and it improved the efficiency of its deliveries

M&S said it expected to cut £120m in costs this year across technology, logistics and stores. Machin said the retailer would not be making redundancies but was likely to be cautious on hiring new workers as it tried to offset new costs, including £35m related to a new packaging levy.