M&S Food Logistics Investment Considered an Undervalued Growth Play

Shore Capital has welcomed Marks & Spencer’s (LON:MKS) £340 million plan to build an automated national distribution centre in Northamptonshire, saying the investment underlines the retailer’s ambition to double the size of its food business and signals further upside for the shares.

Analysts at the firm noted the  “landmark £340m investment in its food supply chain,” adding that it should lower costs to serve, enhance availability and support M&S’s market share gains in grocery. Marks & Spencer is a Shore Capital House Stock.

“We welcome this announcement… the Group’s equity looking somewhat detached from its immediate peers, in our view,” the broker said.

The 1.3 million square foot centre, scheduled to open in 2029, is expected to feature high levels of automation, including pallet cranes, high-speed shuttles, and hands-free cage picking. 

Shore Capital said the investment fits well with M&S’s broader capital priorities, including store renewal, digital upgrades, and sustainability initiatives through its Plan A programme.

The broker highlighted the company’s progress in reshaping its estate, with a target of 420 larger food stores and 180 more productive full-line outlets by 2028. 

It added that the logistics upgrade should complement ongoing improvements in retail execution and customer reception.

While Shore Capital sees a near-term “earnings hiatus” in fiscal 2026, it expects M&S to regain momentum in 2027. 

“If the firm is back on track for FY27, then we see the Group’s equity as materially undervalued compared to its direct peer group like Next, Sainsbury’s and Tesco,” the analysts wrote.