Marks & Spencer: great food, bad clothes

Sales are up, but clothing needs a rethink.

With total UK sales up by 2.6 per cent, the headline on today’s M&S results is that the company has delivered the strongest quarterly trading growth in two years. While this is true, such a statement belies a whole host of underlying issues; many of which are, as of yet, unresolved.

Despite the solid overall growth, there is a strong sense of déjà vu in the latest set of numbers: the polarised performance of falling clothing sales and rising food sales continues and seems to have become somewhat entrenched. Indeed, the polarisation is even sharper this quarter given the particularly robust uplift in food sales – an uplift which has saved M&S the embarrassment of a weaker set of trading results.

That this pattern has repeated itself over a relatively long period of time raises two critical questions: can the negative trend in clothing be reversed and, if so, what does M&S need to do to reverse it?

On the first point, it is almost impossible that M&S will ever go back to the pre-1998 heydays when its clothing market share was at its zenith. The market has changed too fundamentally since that time and the more fragmented landscape makes it impossible for a player of M&S’s configuration to take the share it once did. However, that does not mean to say that M&S’s market share could not be bigger and it certainly does not mean that M&S should accept recent declines in share as being inevitable. It has the potential to do much better; whether it has the will is another matter.

The fundamental problem with M&S is that it still thinks and behaves like a middle market clothing retailer of yesteryear. Many attempts have been made to shift this attitude and it would be unfair not to recognise that some progress has been made. However, old habits die hard and M&S’s middle market DNA still shows through in so many ways, especially on the product front.

There are two critical issues with product. The first is that there is a lack of targeting and empathy with core customers, which means that the offer is frequently not one that is seen as being "must have" – something that is now critical in clothing. The second problem relates to product merchandising. Although M&S’s newer stores are a significant improvement over what came before them, there is still a feel of drowning in a ‘sea of product’ which makes it hard for consumers to pick out key trends and styles. This method of merchandising continues to be out of step with the more segmented way in which many competitors present their offers and means that M&S often lacks the ‘"exclusivity" or "excitement" of rivals.

A further issue is M&S’s focus on the"value" part of its range, which we believe is too great and is an underlying symptom of a relatively weak offer and lack of confidence in clothing. While the market is undeniably more price sensitive, the key issue for consumers is value for money rather than just low prices. In the case of M&S, this is about adding value and interest to clothing ranges so that customers are willing to pay more. This, and not a focus on price, needs to be the direction of travel going forward.

With demand in a lacklustre state, the above would be enough of a problem if competition was static; however, other players have been aggressive both in expanding and in developing their ranges and propositions. In light of this, M&S seems to have been increasingly left behind. A prime example is John Lewis which has a strong customer overlap with M&S: the reinvigoration of its fashion offer might not have contributed much to M&S’s declining clothing share, but it – along with many other players – will have certainly nibbled away at it. Next has also improved its fashion credentials, as has Debenhams through its own brand offers; meanwhile, Primark continues to lead on price. Collectively, all of these players – and more – are putting the squeeze on M&S.

Interestingly, the food business provides a template for how M&S should approach clothing. Here M&S is unashamedly directional; it does not try to be all things to all men. The stance, while recognising the need to provide good value for money, is strongly skewed towards the premium end of the market. Brand segmentation is clear and innovation ensures that various parts of the range are regularly refreshed. All of this is supported by a marketing effort that creates customer interest and genuinely reflects the strengths of the proposition. All of these factors have contributed to an impressive market beating performance over the last quarter.

Overall, despite the lacklustre results, M&S remains a solid player and has significant potential. There are plans in place to remedy some of the issues inherent within the business, but the remainder of 2013 will need to be a year of delivery and action if the company is to turnaround its fortunes.

Photograph: Getty Images

 Managing Director of Conlumino

Photo: Getty
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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.