U.K. supermarkets Marks & Spencer (M&S) and Tesco reported strong holiday sales on Thursday but cautioned that they face escalating costs in 2025 as a result of tax changes and persistent inflation. Both companies anticipate significant financial strain due to an upcoming increase in the National Insurance rate, a payroll tax used to fund social programs.
Strong Sales But Growing Challenges
M&S posted a 5.6% rise in sales for the third quarter, while Tesco, the nation’s largest supermarket chain, saw sales increase by over 4% during the same period. Despite these gains, both retailers are preparing for a challenging economic landscape.
“This was another good Christmas for M&S, building on a strong performance in the prior year,” said Stuart Machin, CEO of Marks & Spencer. “The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control.”
Machin emphasized that the company is not complacent about its future prospects, citing rising tax burdens, inflation, and fluctuating interest rates as key concerns.
