London, Jan 25, 2026, 09:39 (GMT) — Market closed
- M&S shares finished Friday nearly flat as investors digested new UK consumer data
- UK retail sales came in stronger than expected, providing a short-term boost to the sector
- Attention turns to whether clothing demand strengthens absent steeper discounts
Marks and Spencer Group plc (MKS.L) shares ended Friday at 361 pence, slipping 0.06% amid a tight trading band between 359.5p and 368.9p. The British retailer, valued near £7.3 billion, remains under its 52-week peak following a volatile January. 1
The muted finish is significant since M&S offers an early glimpse into UK household spending—not just at the checkout. Food sales remain steady, but clothing is less reliable. This divide shapes expectations for margins and the spring outlook.
Friday’s data revealed a stronger consumer picture than expected. Retail sales volumes climbed 0.4% in December compared to November, defying forecasts that predicted a 0.1% drop. Neil Birrell, chief investment officer at Premier Miton, remarked that the November budget “was tough, but people’s worst fears weren’t met.” On the other hand, RSM UK economist Thomas Pugh cautioned that a turbulent leadership contest could pose “a significant downside risk” to confidence. 2
For M&S, the key focus is the discretionary aisles. Investors need to see evidence that shoppers will pick up more than just Christmas sandwiches and party food when the sales end.
In its latest trading update, M&S reported a 5.6% rise in like-for-like food sales for the quarter ending Dec. 27, excluding new store openings and closures. Meanwhile, fashion, home, and beauty sales fell 2.9%. CEO Stuart Machin highlighted that food “hit a new market share milestone” and said the non-food division was “getting back on track” after the “tail end of recovery” from the cyber incident. AJ Bell analyst Dan Coatsworth noted a “bigger than usual” sale aimed at clearing inventory. 3
Peers are sending mixed signals as well. Next raised its full-year profit forecast once more this month, following a 10.6% jump in full-price Christmas sales, though it warned growth would likely ease in 2026/27. This highlights how demand can remain strong at the premium end even while the broader clothing sector struggles. 4
Technically, M&S has been stuck around the 360p mark, unable to break free. This isn’t so much about the chart itself, but more about the guidance. The shares usually react when management discusses stock levels, pricing strategies, or shifts in online trade.
Still, the upside remains fragile. Should consumers pull back after a single strong month, or if M&S ramps up promotions to move clothing, earnings could slide fast — with higher-margin segments taking the hit first.
Traders entering the next session will zero in on consumer confidence data and new retail reports for clues on January discounting. Pay close attention to wording around full-price sell-through and inventory, beyond just sales figures.
M&S’s full-year results land on May 20. Investors will be watching closely to see how much of the recovery hinges on food sales, and if clothing can expand without leaning heavily on discounts. 5
