Marks & Spencer mounts a comeback after profit hit by cyberattack

Marks & Spencer has laid bare the full impact of a gruelling cyber-attack on its earnings. Profits have nosedived as shoppers were unable to buy everything they wanted during a catastrophic summer for the retailer.

A £100 million insurance payout will help to soften the blow, yet there are bigger issues at hand which need to be resolved.

Its rivals made hay while the sun shone, with Next among the names luring customers away from M&S during the lengthy period of disruption. M&S says the recovery in trading for clothing has been slower than food, suggesting that some people who tasted the flavours of rival retailers might not necessarily come back quickly.

Source: M&S, 5 Nov 2025

M&S will need some bright ideas to get its tills ringing as much as pre-cyber-attack times, which means clever marketing and ensuring its autumn/winter ranges are positioned as must-have items.

The timing of the cyber incident couldn’t have been any worse. A sunnier than usual summer period in the UK got people out of the home and into the shops, helping to stimulate demand in what’s been a tough year for retailers.

M&S was unable to fully capitalise on this tailwind as it suffered stock availability issues. Even those who prefer to shop online suffered the headache of a transactional website not accepting orders for a period.

While M&S’ shops and websites are now back to normal, there is still a lot of work to do to put the company back on top.

Key challenges ahead

Earlier this year, M&S decided to bring forward investment into technology to fortify its defences against any future cyber threats and have better capabilities across the business. At the same time, there is a programme to update stores and improve its supply chain. That’s a lot of work on its own, let alone trying to woo shoppers back into its stores.

Cost pressures remain an issue across the retail sector and the industry is praying that Chancellor Rachel Reeves doesn’t bring more bad news in the forthcoming Budget. The prospect of tax hikes is not good for consumer sentiment, and retailers would argue they’ve already had to stomach a big increase in employment-related costs from last year’s Budget.

There is a real chance that Christmas retail sales could be weak if the chancellor finally delivers on ‘difficult decisions’ and creates more gloom to put the public finances back in order. Reeves might argue that pain now is the only way to achieve gains later.

Food success

M&S is fortunate that its food arm continues to go from strength to strength. It has benefited from clever product innovation and smart marketing such as launching products that have the right ingredients to be viral hits on social media. That’s all very well, but ‘going viral’ only lasts for a fleeting moment. M&S needs to keep coming up with new ideas and be a trailblazer, not a trend follower.

Shoppers can trust its food items to be good quality, and people are happy to pay up for it. The decision to also have lower-priced items on core lines helps to broaden its customer base and gets more people through the doors.

The joint venture with Ocado is ticking along, but there is always a nagging feeling it could be doing a lot better. More people are actively using it, customers are showing loyalty, and they’re shopping more often. That’s a good position to be in, but the venture isn’t making a profit.