Turning Around another Supertanker; Marks and Spencer

It has been a while since I have written about Tesco, Marmite excepting, and the last few times I did, I used the analogy of a supertanker and the relative slowness at which lumbering retail giants see their strategies take effect.  In Tesco’s case the Dave Lewis era has seen a turnaround in the approach focusing on a smarter, sharper, but also smaller business.  It seems to be beginning to have an effect but shaking off the bad bits of the past is tough.

These descriptions came to mind in the recent news about Marks and Spencer; a substantial cut in international activity, a pruning of sub-brands, reduced product lines and more focus, an axe to 30-60 UK stores and a refocusing on food stores and food sales.  The markets seemed initially impressed, but then fell back as they digested the relatively limited scale of the store changes and the time this was meant to take.  A supertanker being slowly turned seems an apt analogy again.

The M&S announcements should not really come as any great surprise.  They have been quietly closing and moving some stores.  Simply Food has been rolled out rapidly, so 200 more planned is no shock.  Food has been a comparative success, but clothing and home has been in freefall for some time.  With a new team in charge, the expectation was for change.

So what has been going wrong?  Clothing and home has been underperforming for years.  The offer does not clearly stand out as fashion and other competitors have eaten in to this market.  JLP is now the darling not M&S.  As the same time M&S were late into the internet and have experienced severe website redesign issues.  The latest half-year figures for the internet sales were flat, which is not good enough and pales by comparison.

Most fundamentally however M&S are now burdened by a store estate that in the past would have been seen as an asset.  Too many unprofitable large stores have been maintained and too little has been spent on remodelling, relocating and repurposing the best of the store estate.  The market has changed but the store estate has adapted too slowly.  And despite the pain that will be felt by the announced store closures – for high streets generally but especially for those who work in the stores affected – it is hard not to conclude that more will have to be done and faster.

But some of the comments were overdone.  Some of the media – and I did two radio shows on the subject – seemed to think M&S was now another Woolworths or BHS.  It is not (yet), and the process underway is setting out to make sure it is not.  Yes, profits were down, but exceptional pension items made some figures look worse than the underlying performance.  M&S is still a major, large retailer; one caller on a phone in bet me they would be dead in 5-7 years.  I don’t see that at all.

M&S remains one of Britain’s good retailers; it just needs a faster, more certain course adjustment.  Don’t be surprised if these recent announcements are only the beginning.

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 Consumer Change, Digital, Food Retailing, Internet shopping, Marks and Spencer, Property, Retailers, Shop Numbers, Simply Food, Store Closures, Turnaround and tagged , , , , , . Bookmark the permalink.

2 Responses to Turning Around another Supertanker; Marks and Spencer

  1. David Chatyrbok says:

    Great read. Miss the school work!

    David Chatyrbok
    MBA

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