High street giant Marks & Spencer has warned more price hikes are on the way.
The retailer said while sales were so far proving resilient and customers are "determined" to spend over Christmas, trading will become much tougher in the new year as the cost-of-living crisis hits hard. The chain said the M&S shopper is set to prove more resilient, while a recent overhaul at the group "may provide some insulation from the gathering storm".
It has reined in price rises where it can, passing on price increases of around 8% across its food halls versus an 11% rise in its own costs. But it lifted clothing and home prices by about 7% in the first half and is set to increase these further as the pound's slump against the US dollar makes it more expensive for the group to buy in stock.
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M&S said: "We expect market conditions to become more challenging in 2023-24. The combined impacts of the cost-of-living squeeze and the most marked rise in the cost of doing business for many years are creating pressure on margins industry-wide.
"All parts of the retail sector will be affected, and this will result in unviable capacity leaving the industry, creating opportunities for the leaner players who remain."
M&S recently said it is speeding up a major shake-up of its stores estate, which will result in the closure of 67 larger shops as part of long-term plans to axe 110 stores under a sweeping overhaul led by previous boss Steve Rowe.
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