The Maze: On November 10, British retailer Marks & Spencer told investors it still aims to make nearly half of its fashion, home and beauty sales online. Online accounted for 35% in its latest half-year. The company wants to reach that higher share while running 180 productive stores and earning an operating margin above 10% in each channel. Its own results show the difficulty. As the mix of orders shifted towards products shoppers return more often, the work of shipping orders and processing returns grew faster than sales.
Source: N Chadwick via Wikimedia Commons. The Pantheon flagship on London’s Oxford Street in January 2024, before the 2026 renovation. [CC BY-SA 2.0](https://creativecommons.org/licenses/by-sa/2.0/).
The details
🛍️ The margin goal applies to each channel. M&S had already outlined the online and store ambitions in 2025. Its November investor update spells out a margin above 10% both online and in stores. Operating margin is the percentage of sales left after operating costs. Online took 35% of the division’s sales in the 26 weeks to September 26, 2026, up from 33% in the equivalent 2024/25 period. The division posted a 7.5% adjusted operating margin across the two channels in the latest half. The investor update gives no exact date for reaching the goals.
📦 More orders mean more work after checkout. M&S says demand shifted towards categories with higher return rates, and delivery and returns work grew faster than sales. It plans a dedicated returns warehouse in Sheffield to cut the time and cost of handling products sent back by shoppers. M&S expects its automated fashion warehouse in Lichfield to open in 2027 and give it more capacity to move merchandise to shops and directly to customers.
🏬 London offers a test for the store plan. M&S is focusing on branches that can carry fashion, home and beauty alongside food. The refurbished Pantheon flagship on Oxford Street is a test site for future store investment. M&S says sales on its fashion, home and beauty floors rose 27% after reopening compared with 2024/25. That figure covers one location and measures sales. The investor release gives no list of affected stores.
Our take
The online sales share will tell M&S where shoppers place their orders. The margin targets make it answer a harder question about how much money it keeps after serving them. Two operating measures would help show whether the investments are paying off.
🔄 Time how long returned stock sits idle. M&S is setting up a dedicated returns warehouse in Sheffield. The team can test whether it costs less to check an item and how quickly a saleable return gets back into stock. A jacket back on sale while shoppers still want it is worth more than one that resurfaces after the season. The company’s results give no realised savings from the site.
📍 Make each store renewal earn its keep. The Pantheon’s 27% sales gain makes it a useful place to study what a refurbished shop can sell. Before using the same format elsewhere, the store team would need to see what additional profit remains after staffing and running costs, then compare it with what the refit cost. A London flagship can draw a different mix of shoppers from a smaller branch.
