Marks & Spencer is set to supplant the John Lewis Partnership in the ranking of the biggest retailers in the UK, an exclusive forecast by Retail Week Prospect reveals.
Retail Week Prospect analysts found M&S has a CAGR of 2.7%, while JLP is set to grow by 1.8%, meaning the rival retailers would swap places at seventh and eighth in the ranking by the end of FY2023.
Retail Week data and insights director Lisa Byfield-Green said: “M&S’ willingness to evolve and diversify has been key to its success. It has been on a long-term mission to transform its business, first under Steve Rowe’s five-year plan and now under the ‘reshaping for growth’ strategy led by CEO Stuart Machin and co-CEO Katie Bickerstaffe.
“With a reduced store portfolio for John Lewis department stores, there are many customers that do not have easy access to a store. This makes the business heavily reliant on the online channel, which makes significant growth difficult in the current market as footfall returns to high streets and shopping centres and customers shift away from buying as much online. Waitrose has also seen sales slump this year as customers trade down and reduce basket sizes in the cost-of-living crisis. This means that our forecasts for the grocery part of its business have been revised down.”
The ranking also found Amazon was on track to move into the top three UK retailers within the next few years, packing on the highest growth rate of any retailer in the table and overtaking Asda by nearly £8bn.
“We had originally forecast Amazon to be number two behind Tesco but in light of its current cost focus and its first-ever year of single-digit growth in 2022, we revised our forecast down slightly,” said Byfield-Green.
“Amazon will certainly be focused on reducing costs in 2023 but at the same time, it will continue to invest in innovation and big programmes that could ‘move the needle’ at Amazon, according to chief executive Andy Jassy. That means Amazon is really one to watch as by 2024 the restructured company could go back to double-digit growth and accelerate its way further up the ranking.”