“We have a plan but it’s a high wire act and we have got to keep both feet on the wire,” says Archie Norman, the chair of Marks & Spencer.

M&S may have had a blockbuster year – its share price up 40% and gains in market share in both food and clothing – but the retail stalwart is not satisfied.

Before the group’s festive trading statement this Thursday, Norman, who joined the company seven years ago and has helped engineer a revival many thought impossible, says: “We have a lot more to do. Four years of decent results and people may think job done, but in fact there is long way to go.”

After significant changes in its food business, including the takeover distribution partner Gist, and a reworking of its womenswear, M&S is now revamping its beauty products and childrenswear, rebuilding its homewares ranges and rebooting its international arm as it reinvents the department store to take on rival John Lewis.

“We think keeping the spirit of the turnaround is essential because it takes a long time to irreversibly change a business,” says Norman, who may have just two years left in the role if M&S adheres to the City convention of a nine-year term.

In 2018, Norman, a longtime industry figure best known for reviving Asda in the 1990s, said M&S was on a “burning platform” and needed to make big changes.

Under its chief executive, Stuart Machin, who took the reins in 2022, the group has closed more than 50 outdated stores, revamped a quarter of its estate and last year shot back into the FTSE 100 for the first time in four years.

M&S is poised to make pre-tax profits of about £840m in its current financial year, its best result in more than a decade. Next week, the retailer is expected to report food sales growth of 7.8% for the last quarter of 2024, but clothing and homeware sales growth of just 0.7%.

M&S is already the UK’s biggest seller of fresh Christmas turkeys and festive knitwear, and sells more than a third of the country’s underwear. Now its shift to offering affordable basics in food alongside innovative and fun treats is helping the retailer gain ground in a tough market.

Food sales rose by more than 10% in the three months to 1 December, the latest figures from the market data and analytics firm Kantar show, outshining all its big rivals including Lidl, Sainsbury’s and Waitrose.

On clothing, M&S has increased its market share to more than 10% and has had to buy in more smaller-sized womenswear and lingerie as consumers in their 30s and 40s reappraise the brand.

However, Machin, a boss so focused on his business that he was revealed to be the top customer for M&S chinos, recently told City analysts and investors that he was “very conscious” that the retailer had gained a reputation for lauded turnaround plans that give “one or two good years and then a fall away”.

Since 2000, two years after the group reported profits of more than £1bn, M&S has tried to revamp many times. “Our plan is to be very different,” Machin said, promising to “hardwire transformation programmes into the organisation and everything we do”. He has been shaking up a hierarchical culture with a focus on the “unvarnished truth” about the company’s most challenging problems.

The revamp centres on a push to win over younger shoppers with families through a range of gambits including cheaper milk and bigger packs of pasta and vegetables, as well as improved baby clothes.

Product improvements are in train across clothing – particularly childrenswear where M&S has historically underperformed, relying more on school clothes and frilly gifts than everyday fashion.

After years of falling market share, M&S is also winning back women with improved quality and style and a better edited range.

“Clothing is almost unrecognisable, it is so much more contemporary,” says Patrick O’Brien, a director of UK retail research at the analytics firm GlobalData. Menswear, for example, used to be “extraordinarily dour” with “ridiculously baggy” suits, he says. Now it can stand up against more expensive specialist rivals.

Having exited the expensive-to-deliver and highly cyclical large furniture market – no more sofas and beds – M&S is also keen to increase its market share in soft furnishings, tableware and kitchen kit.

There is also a decade-long plan to overhaul the distribution system, from suppliers to stores, simplifying and automating an ageing infrastructure. Recent labour cost increases announced in the government’s autumn budget are likely to fast-track this.

Susannah Streeter, the head of money and markets at the investment platform Hargreaves Lansdown, says such changes will help reduce costs and keep prices down. “Operational and strategic improvements and enhanced cash generation means the business is now in much ruder health,” she says.

An indication of M&S’s direction can be found at its newest updated shopping space at Bristol’s Cribbs Causeway, a retail complex where it is reinventing the department store. The 7,432 sq metre (80,000 sq ft) outlet has a vast wine shop, deli, florists, cafe and sections for denim, lingerie and bedding marked out with neon signs.

The £21m revamp shows how the 140-year-old chain is now taking the fight to John Lewis, having seriously trod on the toes of it rival’s sister supermarket, Waitrose, last year.

Food has been at the forefront of M&S’s revival, with 1,500 new products added to the 6,500-strong range in the past year.

Jonathan Pritchard, a retail analyst at the investment bank Peel Hunt says the chain’s Innovation Hub, which develops new products, is something that “barely exist[s] elsewhere in the food retail industry and we expect M&S to continue to widen its lead on product quality, which obviously feeds in further to the value for money image”.

The group is also gaining market share by increasing space for food. In 2017, M&S owned 261 food-only stores – although many more were operated by franchise partners. It now has 325 fully owned food stores and wants 420 by 2028. Many of those will be larger food-halls where you can do a weekly shop, rather than Simply Food convenience stores.

Meanwhile, Machin has pledged to cut the number of full-line stores – which sell clothing and homeware as well as food – to 180, down from 302 in 2017. The group is about half way to reaching that target.

As many as 80 more full-line stores could close and up to 40 new ones open. Some stores will relocate, shifting away from high streets and old multi-floored buildings, while others are being converted into food-only sites. The result will be the amount of space devoted to clothing and homewares shrinking by 17%, whereas food space is expected to rise by 13%. Only about a quarter of the group’s store estate has been revamped so far.

Online food is more of a challenge. The group remains in dispute with its joint venture partner Ocado over whether M&S needs to make a multimillion pound performance payment. The joint enterprise – Ocado Retail business, which delivers food from robot-run warehouses – remains lossmaking, with profit seemingly far away.

A further fly in the ointment is M&S’s international business, which is under scrutiny after sales fell 10% in the six months to the end of September while operating profit almost halved. Machin said recently that the group needed to “restore the competitiveness” of its international operations by helping franchise partners lower prices and be less reliant on historical bestsellers.

However, Norman says the group as a whole is on track. “I do believe that we have shown the opportunity of making M&S a great business. The critical thing now is to create a growth business. We are in a very strong position to achieve this and we have a plan,” he says.