GlobalData : Third lockdown doesn’t bode well for M&S as it struggles to adapt

08 Jan 2021
Third lockdown doesn't bode well for M&S as it struggles to adapt Posted in Retail

Following today's release of Marks & Spencer figures forQ3 FY2020/21;

Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, comments:

'M&Shas reported a tale of two halves, with a healthy performance in its food division managing toprop up total UK sales of £2,529m while clothing & home floundered, paying the cost forits inability toadaptfast enough tochanging shopping habits. After a terrible Christmas forclothing & home in 2019, 2020 leaves little tobe desired despite an improved performance compared toH1 (-40.8%). M&S' recovery is slow versus other apparel players asitcontinues tobe hurt by an online platform unable tomake up forlost store sales (-46.5% in the period), unlike competitor Next due toits agile market-leading online proposition, and a lacklustre product offer.

'The retailer's focus on value in food has started topay off, with decent sales growth especially considering dampened footfall on high streets and that many of its travel hub locations will have been closed. M&S' focus on value is smart, especially considering the COVID-induced financial insecurity faced by many consumers, but itis something itcannot compete with the likes of Tesco on, so itmust showcase its more unique, innovative products too. Its partnership with Ocado will have boosted sales and will become even more important asthe UK endures another lockdown.

'Though M&S' Q3 clothing & home performance was improving prior tothe November lockdown(-16.8%) and following it(-19.4%), the closure of non-essential stores potentially until the end of March will see this recovery wiped out asitpays the cost of being a digital laggard. Its Never the Same Again programme is vital now, and the focus of M&S' actions must be tobetter adapttoshopping habits. Forinstance, itwas late tothe party tointroduce brand partnerships such asNobody's Child and Ghost which launched with little fanfare. M&Sshould focus on elevating and boosting awareness of these brands instead of potentially buying a similarly struggling Jaeger which would be costly toturn around and do little toboost the retailer's fortunes. Additionally, the extension of its Goodmove activewear line tomenswear and childrenswear after nearly a year of launching itin womenswear is too little too late, with little todistinguish the product in a crowded market.'