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Not just any fall from grace... What went wrong at M&S?

PUBLISHED: 08:39 25 May 2018 | UPDATED: 12:24 25 May 2018

Marks and Spencer store in Norwich. Picture : ANTONY KELLY

Marks and Spencer store in Norwich. Picture : ANTONY KELLY

It has been a bellwether for the high street for more than a century; its buildings dominating the centre of cities like Norwich and its name a by-word for quality.

Marks & Spencer has suffered in recent years as shoppers turn to rivals for food and clothing Picture : ANTONY KELLYMarks & Spencer has suffered in recent years as shoppers turn to rivals for food and clothing Picture : ANTONY KELLY

But there have been troubles at Marks and Spencer over the last decade and this week came to a head with the announcement it is to close 100 stores by 2022.

The first British retailer to make a pre-tax profit of more than £1bn, back in 1998, announced profits had fallen 62% to £66.8m in the 12 months to March 31.

So what has gone wrong at M&S?

The struggles of other retailers such as Toys R Us, Maplin and New Look have been well documented but increased business rates, high rents and online competition – which have caused strife for those names – are not the only forces at work for M&S.

Marks and Spencer on St Stephens Street, Norwich, back in its heyday 

Picture: James BassMarks and Spencer on St Stephens Street, Norwich, back in its heyday Picture: James Bass

Chief executive Steve Rowe says the “need for change is urgent” and a plan “to restore the basics” is under way, noting that Wednesday’s results reflect the costs that come with the transformation.

He has talked of “transforming our culture” to make M&S a faster, lower-cost, more commercial, more digital business.

It has long acknowledged that its problem is particularly acute for its clothing arm – like-for-like sales fell by 1.9% in the year – in the face of pressure from competitors such as Primark and Next, but its food offer – once the leading light of its operation – has also suffered as cost-conscious shoppers turn to rivals.

While discounters, such as Aldi and Lidl, have driven down prices across the big supermarkets Marks has always built its image on quality, hoping customers would be willing to pay a premium.

Manager Andy Barber and the staff at the Norwich Marks & Spencer store reopening in 2011. Photo: Bill SmithManager Andy Barber and the staff at the Norwich Marks & Spencer store reopening in 2011. Photo: Bill Smith

As prices have dropped further and consumers have become more and more cost conscious, moving away form luxury retailers.

In a similar vein customers’ habits have changed when it comes to clothes with M&S representing the middle England to younger shoppers who are instead lured to fast fashion chains such as Primark and H&M, while older shoppers have complained that the ranges are no longer stylish.

Despite the pain the company still holds an enviable position in the public mind with it being rated as the joint third best brand by YouGov in 2017 – showing just how strong it has been.

Ratula Chakraborty, senior lecturer in business management at the University of East Anglia, said the future was bleak for M&S unless change was achieved – with its convenience food stores propping up an unwieldy portfolio of larger outlets.

Brian Wells, 43, Barista from Bridge Street Picture: Emily BarkerBrian Wells, 43, Barista from Bridge Street Picture: Emily Barker

She said: “The future for M&S looks quite bleak. Its financial difficulties are likely to continue unless it can begin to extend its appeal to younger, aspirational shoppers for clothing and homewares.

“This is the source of financial success that Next has managed to achieve.

“Unfortunately, for M&S, news of store closures and falling sales only adds to an already tarnished brand image that will no doubt reduce its customer base yet further, dragging M&S into a downward spiral.

“Accordingly, we should expect even more large store closures to come as M&S increasingly relies on its Simply Food stores for survival.”

Deborah Read, 59, greengrocer from Lakenham Picture: Emily BarkerDeborah Read, 59, greengrocer from Lakenham Picture: Emily Barker

Norfolk has seen several M&S convenience and petrol station shops spring up in recent years, adding to the brand’s larger presence in King’s Lynn, Norwich city centre and Norwich Longwater.

Online competition has come on both fronts with the younger generation taking to web retailers such as Asos for clothes and Ocado for groceries.

E-commerce companies are able to dispense with the expensive overheads faced by bricks-and-mortar retailers with large estates such as M&S, who have faced a rise in business rates with a revaluation last year, as well as a fall in footfall.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said M&S was “simply struggling to make progress in a world where a compelling mobile app is every bit as important as a presence on the high street, and considerably less expensive”.

Ron Fyfe, 58, market trader from Unthank Road Picture: Emily BarkerRon Fyfe, 58, market trader from Unthank Road Picture: Emily Barker

Norwich-based brand and design strategist Andy Griib said while Marks and Spencer was still known for quality and good service the problem came with how customers experienced that brand.

He said: “Brands are measured by a variety of different matrices and brand indexes, and these reveal that the M&S brand, in the three measured categories; food, high street retail, and high street fashion, are number one for quality, value and customer satisfaction.

“So, the brand perception of M&S appears to be good. We still love the quality and know we will receive good service.

“The problem apparently lies with the brand experience, in other words, what we think when we are in-store or online.

Sumsoor Miakhiel, 23, stall holder from Beecheno Road Picture: Emily BarkerSumsoor Miakhiel, 23, stall holder from Beecheno Road Picture: Emily Barker

“If we, as consumers don’t receive anything but the promised or perceived brand experience – however that is imagined in our own minds – we’ll feel a little disappointed or possibly under valued.”

He added M&S had profiled its typical customer and he feared had fallen into an “internal perspective” brand trap focusing on what they sell not why they sell it.

What are shoppers’ views of M&S?

Shoppers’ views of Marks and Spencer have changed from its heyday when it was known for its quality and style.

Reporter Emily Barker took to the streets of Norwich to find out if opinions had changed.

Barista Brian Wells, 43, of Bridge Street, Norwich, said: “I avoid [M&S] now, it’s quite expensive. It’s an okay shop, it’s just gone downhill.”

Greengrocer Deborah Read, 59, from Lakenham said: “I go there for the clothes rather than the food. However, the men’s clothing over the past couple of years has got duller. Some things are expensive.”

Market trader Ron Fyfe, 58, who lives in Unthank Road, said: “I go in the food hall when I’ve had a good day, maybe once a week.

“I don’t go there for clothes, the clothes are bland.”

Fellow stall holder Sumsoor Miakhiel, 23, said: “I sometimes shop there to get lunch.

“I don’t shop for clothes. I don’t look at the prices of the clothes though.”

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