Marks & Spencer (MKS), Tesco Shares Fell on Christmas Updates

The Marks and Spencer Group Plc (LON: MKS) share price fell by 6.69%, while the Tesco share price fell by less than 1% after both retailers released their Christmas updates. Both retailers released upbeat December and quarterly figures reassuring investors about the health of the UK consumer market. 

M&S:

The retailer revealed that food sales in the 13 weeks to 30 December 2023 rose by 10.5%, with like-for-like (LFL) sales up 9.9%. The company also noted that its clothing and home sales rose by 4.8% during the quarter, with LFL sales surging similarly. 

Interestingly, the surge in clothing and home sales was driven by an increase in the average selling price as UK consumers were willing to spend more on their favourite clothing and fashion items during the festive season. 

The company managed to increase its market share in critical segments, such as womenswear, amid an improvement in customer perceptions of its clothing items, which were regarded as being of a higher style, quality and value than its competitors. 

However, the retailer’s international sales declined as it registered a 6.4% drop driven by the timing of planned franchise shipments to the Middle East and Asia and much more demanding market conditions in India.  

M&S noted that its expectations for the 2025 fiscal year were uncertain due to geopolitical and customer risks, higher-than-expected wages, business rates and cost inflation.

Tesco:

The retailer surprised to the upside by recording a solid market share gain of 15 basis points, to 27.9% in the four weeks to Christmas. The company noted that like-for-like sales growth in the six weeks leading up to Christmas was 6.8%, including a 9.2% growth in the four weeks leading up to Christmas. 

The company highlighted its position as the cheapest full-line grocer over the past 14 months as it had much less inflation than its competitors. The company’s success was based on price cuts on a large section of its products. 

Therefore, the decline in the M&S and Tesco share prices was primarily driven by negative investor sentiment despite the two retailer’s upbeat performance. 

Marks and Spencer (M&S) share price. 

The Marks & Spencer (MKS) share price fell 6.69% to trade at 260.90p from Wednesday’s closing price of 279.60p.