Marks & Spencer given “junk” status by credit ratings agency S&P

As we identified at the end of April, Marks & Spencer has so far been the food retailer to be worst hit by coronavirus. On Friday, credit ratings agency S&P downgraded the retailer’s investment grade status to a “junk” investment rating. This is significant for the retailer because it signals to investors that lending to M&S, through for example corporate bonds, should now be considered a speculative investment.  “Junk” status normally increases the cost of borrowing for companies, potentially impacting economic recovery if the lockdown is gradually lifted.

The retailer has been hit harder than others partly due to its reliance on non-food sales such as clothing and home goods.  As shown in the Food Foundation’s share price analysis, other retailers have seen some recovery in share prices with Ocado in particular enjoying significant growth. The restaurant sector has seen a similar downward trajectory as Marks & Spencer’s. See here for our share price tracker.

View our COVID-19 tracker in full.