Marks & Spencer warns sales growth will slow due to cost-of-living crisis

The high street giant's Russian arm, which is run by Turkish franchisees, operates 48 shops and 1,200 employees.

In March, the company stopped shipments to the stores following the invasion of Ukraine but has now said it will "fully exit our Russian franchise" and face a £31m cost hit as a result.

It said profits for the new financial year will start at a lower level due to the impact of its withdrawal from Russia and the end of the business rates holiday.

It added that it expects this will stay lower throughout the year "given the increasing cost pressures and consumer uncertainty".

In a statement, M&S said: "Overall trading in the first six weeks of the financial year has been ahead of the comparable periods in 2021-22, including the period from April 12 2021 when non-essential retail reopened, with a particularly strong performance in clothing & home and growth in the total Food business continuing to outperform the overall market.

"While encouraging, we expect the impact of declining real incomes to sharpen in the second half and endure for at least the remainder of the financial year.

"There is no current sign of inflation abating, although we believe the rate of cost growth will subside by the third quarter."

Ross Hindle, analyst at Third Bridge, said: “M&S produced a tasty set of results. M&S’s food offering continues to deliver for the Group and our experts say it could be their secret weapon against the inflationary pressure set to rattle other supermarkets.

“M&S’s premium brand positioning means they are less vulnerable to the pressure from discounters and many of the shoppers they do lose will be replaced by new customers trading down from eating out. Also, the old habits of splitting grocery shopping between multiple supermarkets are back, now the need to do one big weekly shop and return home has dissipated with Covid.”

“As M&S continues its transformation programme, benefits are expected to continue to flow to shareholders. However, one concern does remain around M&S’s clothing range which once again finds itself in no-mans land between affordable and premium clothing.”

"Management echo's the city's concerns around inflation and its result on the UK consumer's buying behaviour. As such, the next 12 months will prove challenging for all retailers as they battle market share with margin.”

Julie Palmer, partner at Begbies Traynor, said: “Steve Rowe has done a lot of hard work steadying the M&S ship, but his successors will have to navigate an uncertain course in a choppy environment if the high-street stalwart is to avoid a return to the troubles that dogged it for years."