This morning’s trading statement from M&S was pretty bleak, but should not have been a surprise. Senior retailers in clothing have been telling me for many months now that this is the toughest market they have ever seen. Indeed, I was forecasting this last year. Even the very strongest players are finding their yoy comps very demanding. Against this background Steve Rowe is initiating change in some fundamental areas of the business. As we know, retailing is a mix of art and science and however brilliant the strategic thinking might (or might not) be, the customer holds every card that counts. So there is some trial and error involved. The critical factor is direction of travel and I continue to think that in broad terms, Rowe is on the right track.
The wider market picture for the 13 weeks covered in Marks’ trading statement is still not clear in terms of data, the ONS having yet to release numbers for June. However, I expect the yoy comparative period figure will be around -5%. So set against this background and taking into account the changes in promotions and pricing, this statement is not quite as awful as first appears.
That said, the numbers underline the scale of the task ahead. Effective business change takes time, especially in a contracting market with far too many players. And therefore setting too much store by one quarter’s numbers risks drawing unrealistic and generally wrong conclusions. Brexit overlays much tougher economics on a retail market already struggling to cope with chronic oversupply. Rowe needs to be given the time and space to make the necessary changes so Marks becomes much fitter for purpose.
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