Easter, Tesco and M&S

Another month, another set of Scottish retail sales figures, another disast…   Oh, hang on, these weren’t the worst figures ever; which makes quite a nice change. The headline figures were actually not so bad; well at first glance. But, look behind the numbers a little and the picture is not quite so rosy:

  • the comparison month in 2011 was very weak, making out-performance rather easier
  • non-food remains really difficult and is struggling, especially this month beyond the clothing sector
  • March weather was brilliant (for Scotland) which boosted (or did it simply move earlier?) spring clothing buying etc
  • Scotland continues to appear to be lagging behind performance in the UK as a whole.

At this time of year, Easter and the potential for very variable weather gets in the way of easy comparisons across years. So we have perhaps to hold judgement on whether these figures are OK until we can digest April’s data. Maybe taken together the two months will be reasonable (which would give a new feeling to things), but April 2011 is a tough comparison month, even with Easter in April in 2012.

On the same day as the release of the Scottish data, Tesco reported their (much trialled) weaker figures and formally announced their fightback. The Tesco slowdown (which as I have been saying for a while, began for me according to the market share figures, in 2007) has accelerated a little and Philip Clarke has stepped in and put his reputation on the line. Profits in the UK were down (though even with the US, international was up) and the response seems to be reduced capital expenditure (perhaps recognising that large stores may have been overdone and the UK may be over-stored in that regard), more staff to provide better in-store service and the running of the stores “less hot” i.e. better merchandised and stocked.

And on the subject of stock, the Marks and Spencer results this week, whilst interesting in terms of food and especially internet sales, were remarkable for me for the admission that they had allowed themselves to be out-of-stock on some of their best sellers in clothing.

Now we are in recession and consumer expectations and expenditures are a little all over the place, but it does seem that Tesco and Marks lost sight of the customer and their needs, especially in a changing market.

To a small extent this is understandable, as both are public companies with hard stock market taskmasters for whom they have to perform, which in this climate can mean being risk averse (especially given the stock hangovers induced by the collapse of sales at the onset of the recession). With lean approaches to supply being in vogue and cost control critical, the system can sometimes take over the retail basics. This can backfire in that to get consumers to spend the stores need to be interesting and effective, not “merely” efficient.

Consumers want sound stores, selling good products, with interested and informed staff, and at reasonable prices for the value offered. Anything that makes shopping hard in this economic climate is really damaging for retailers. All these figures show just how hard it can be to get it right all the time.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Internationalisation and Graduate Studies.
This entry was posted in Consumers, Customer Service, Marks and Spencer, Retailers, Scottish Retail Sales, Stock, Tesco and tagged , , , . Bookmark the permalink.

3 Responses to Easter, Tesco and M&S

  1. Douglas Brownlie says:

    ” Retail is all about detail. you have to be on ground zero…….” . fighting spin from a tired brand consumers are walking away from. Consumers need environmental clarity, not warehouses of promotional noise and confusing counter-offers as retailers support margins through listening fees extracted from brand owners……what evidence is there that there is any substance to the ‘retail is detail’ spin. Ever been to the local tesco in stirling, for instance. what a shockingly dysfunctional space that speaks of tensions between planners and developers, not the interests of citizen consumers. you claim that consumer (citizen) expectations & expenditures are all over the place. which place? what evidence? come on retailers, talking the detail is good for press coverage, walking the detail is the comeptitive battleground.

  2. Tarlok N. Teji says:

    Leigh, reading between the lines you seemed to have put a sell by date on Philip Clarke’s tenure do you have a specific date in mind?

    • Leigh Sparks says:

      Tarlok, I don’t have a specific date in mind but the clock is ticking. Taking control of UK is a strong move but one that can not continue to see market share slide too fast or for too long. A year of going nowhere might be difficult to explain.

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