Fortnum & Mason sees profits rise, but warns of ‘wider economic headwinds’

Fortnum & Mason saw profits rise in the year to 31 July 2023, but the 317-year-old department store warned of “challenging operating conditions” and “wider economic headwinds”, newly released filings show.

Sales at Fortnum & Mason's UK stores at Piccadilly, the Royal Exchange and Heathrow Airport grew by 34%, returning to pre-pandemic volumes in early 2023. The reopening of the third floor of the Piccadilly store, featuring a food and drink studio, gin distillery, cocktail bar and hamper department, boosted sales.

Online sales, however, suffered an 11% “correction”, but still remained well ahead of 2019 levels.

Despite higher costs, profits still grew by 23% to £7.5 million, though that is well below pre-pandemic levels.

“Whilst we saw a positive sales recovery, we faced challenging operating conditions as inflation grew rapidly, particularly in food and labour,” the business said.

Looking ahead, the West End stalwart said it would focus its investment “only on those things which are most important to our people and our customers” as it expects a weaker consumer confidence to present a challenge. It said it will invest £9.2 million in capital this year, up from £8.2 million in 2023-23.

While it sees headwinds ahead, it said that management have modelled for a number of different economic downturn scenarios and that the business would still have enough liquidity to remain a going concern under all of them.

Fortnum and Mason is owned by the Canadian Weston family, which used to own Selfridges. The firm did not pay a dividend to its parent company during 2023.