What's going on?

UK grocery chain Marks & Spencer (M&S) reported strong annual results on Wednesday.

What does this mean?

The first thing to know about M&S is that it�s fancier than your average grocery store � think more Whole Foods than Walmart. The second thing to know is that its business has been flailing for a while, and it�s been trying everything � cutting costs, investing in ecommerce, expanding its food business � to reclaim its spot on the index of the UK�s 100 biggest stocks. And in its last financial year, it finally edged closer: M&S reported on Wednesday that its revenue rose at its fastest in at least a decade, while its adjusted pre-tax profits were up more than tenfold in the same time.

So you did have to feel sorry for the company when it said it wasn�t expecting this strong business to last, and that its profit would take a hit this year as financial pressures pile up on customers even more.

Why should I care?

Zooming in: Online isn�t the future.
That slowdown is already being felt by Ocado Retail, the joint online grocery offering from M&S and Ocado. M&S earned just �14 million ($17.5 million) in profit from the venture last year � well down from the �79 million ($99 million) of the year before. It doesn�t look like things are changing anytime soon, either: the business issued a profit warning on Wednesday, as well as cut its full-year sales outlook for a second time.

The bigger picture: Inequality, thy name is Britain.
Still, analysts reckon that since M&S�s customers are typically more well-to-do, they�re better placed to absorb the higher prices of quinoa and quail eggs. After all, data out this week showed that higher earners� salaries are now growing faster than those of lower earners. That�s a sharp reversal from before the pandemic, and suggests inequality in the UK is back on the rise.