M&S food sales growth stalls following cyber attack disruption

Marks & Spencer’s booming food business has seen its rapid growth significantly impacted by a devastating cyber attack in April, with new figures revealing a sharp slowdown in sales.

Data seen by The Telegraph indicates that spending in M&S food halls rose by just 0.8% in the four weeks to May 17 compared to a year earlier, a stark contrast to the 11% growth experienced over the preceding 12 months.

The cyber incident, blamed on the criminal group “Scattered Spider,” forced M&S to halt online orders and caused significant disruption to food deliveries, leading to noticeable gaps on shelves and the temporary suspension of some in-store offers.

As a result, M&S sold fewer items in the four-week period, and its market share slipped to 3.3% from 3.6% for the year, causing it to fall below Waitrose in the ranks of the largest grocers, a position it had only recently surpassed.

While M&S has not fully acknowledged direct contact from the hackers, its CEO, Stuart Machin, was reportedly sent an abusive email gloating about the attack, which the BBC has seen. Seven weeks on, the retailer is still battling to restore its IT systems, with online orders remaining offline and disruption expected to continue until July.

The financial fallout is substantial, with M&S already admitting the attack will knock an estimated £300 million off its profits this year, presenting a setback to Machin’s growth ambitions. Clive Black, an analyst at Shore Capital, described the hit to food sales as “wholly expected” given the considerable operational disruption.

However, he anticipates a “robust bounce back” once IT issues are resolved. Richard Hyman of Aria Intelligent Solutions added that M&S is “in a position of strength” to weather the impact.

In response, an M&S spokesperson highlighted long-term market share growth and recent Kantar data showing an 8% rise in grocery sales in the four weeks to May 18, stating stores are “back to normal for our customers.”