Marks & Spencer will overtake John Lewis in the rankings of the UK’s biggest retailers by 2026, according to a new sales forecast.
Tesco will retain its position as the largest retailer, followed by Sainsbury’s, but Amazon is on track to move into the top three within the next few years, industry title Retail Week has calculated.
The forecast, which calculated the compound annual growth rate (CAGR) of the top 30 retailers by sales in the UK, found M&S is on track to overtake the John Lewis Partnership (JLP) within three years.
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 rankings.
M&S recently emerged as one of the winners of the Christmas trading season, with a 6.3% rise in like-for-like sales across its food halls in the 13 weeks to December 31, while it saw clothing and home comparable store sales rise 8.6%.
It said recent sales across stores already revamped as part of its overhaul had traded better than expected, with clothing and home sales 26% ahead of plans at its new store in Colchester, Essex.
But it is also investing in its digital offering, with the rollout of click-and-collect to 130 stores across the UK.
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 co-chief executives Stuart Machin and Katie Bickerstaffe.”
She added: “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.”
Retail Week calculated that Amazon’s growth will overtake Asda’s by almost £8 billion, while Tesco’s rate of 3.1% will fall slightly behind Sainsbury’s 4.1%.
Ms Byfield-Green said: “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.”