Marks and Spencer – a two speed organisation

Good old Marks and Sparks, a place you can trust to get the sort of clothing that your mum would want you to wear and where the quality is never in dispute. Marks and Spencer is so ingrained into the British Psyche that there is a general wellspring of opinion that we would love them to be the retail powerhouse of our memories. Unfortunately, the real gains they have made in the retailing of food have been eroded in non-food, especially clothing sales.

m and s meadowhall clothing

Excellent quality and good prices disguised by confusing merchandising

Walk around any large Marks and Spencer and you will be amazed at the range and the quality of the clothing, there really are some great products to pick up for both genders, the problem is that it is so poorly sign-posted, segregated and confusingly over-sub-branded, that you lose the plot. The issue appears less about the selection and buying of ranges, more the way that these ranges are put together and displayed. It is just confusing and difficult to shop.

m and s meadowhall clothing

Making it hard to find your tribe

It all blends into a fuddy duddy looking mess where the clothes more suitable to a younger audience are mixed up with the twin-sets and A-lines. Hence you get the phenomenon where the younger customers are frightened stiff that they will go out to find their elderly aunt wearing the same outfit. Like it or not, we are all rather tribal and define that by what we wear and how we wear it. If you cannot find your tribe then generally you leave and that generation is lost to you. This is where M & S have ended up, and yet they still have some great clothes, at decent prices. The availability and sizing have also been solid, it’s not that you get there and cannot find it, it’s just you waste too much time trying to find it.

m and s meadowhall food hall

Range confidence obvious in food hall

The contrast to food hall is palpable; here the range and quality is blossoming, as is the confidence in the operation to offer improved fresh availability across the whole day. I look at their delicatessens now and see a mixture of Waitrose, Sainsbury and the best of old Safeway, exciting and really easy to shop. Merchandising is far simpler in food yet they have delivered a food hall that not only makes sense but has zones where excitement and treats disrupt your journey.

m and s meadowhall food hall

Journey disrupted by exciting product well merchandised

If only they could do this in the non-food arena then they would be a force to be reckoned with again.

m and s meadowhall sign

Will the new development involve better use of clothing floor space?

Changes in the senior team structure suggest that Rowe is seeking simpler decisions paths that can only improve the way the floor space is used. If he thinks customer journey as they have done in food hall then he will not go too wrong.

asda logo montage

Will Asda become the sum of its parts?

A New Year and with it new hope for Asda, which for the last three years has been wallowing in declining sales, lost leadership and a Canute like approach to the threat of the discounters.

If Asda was a ship it is one that is limping back to port having been torpedoed by smaller and more agile competition.

Sources suggest that decision making in Asda House is more laborious than ever. There are too few people driving from a point of experienced knowledge, leaving Asda’s talent pool in need of replenishment. Can the two recent heavy weight hires bring more than hope to the table?

Roger Burnley is thought by many to be a potential CEO in the making and a wise and pragmatic man to boot. His arrival cannot come soon enough after a year-long gardening leave due to end this autumn. Andy Murray arrived in February to take the helm of the Asda marketing team and with a pedigree including Saatchi and Saatchi, is expected to have a significant impact.

Clarke has been the longest serving CEO of the big four and has overseen the biggest drop in Asda Walmart’s sales history.

Clarke at least seems confident that he is not going anywhere and will be judged to be either tenacious or deluded.

Yet must be given credit for taking some bold decisions and retaining the profit through cost control and wise capital expenditure. That said, we sense that margin is not enough for Walmart which will be wanting more and expect that change will be being discussed in Bentonville.

If you focus on price as your differentiator and Aldi and Lidl come along and undermine that message, then you have two choices: regain that price difference (impossible for any of the big 4) or you diversify and offer more than just price.

In truth Asda does offer a lot more than price, it’s just it hasn’t shouted about it in the media or in store.

With sound store positions and a broad offer (if unexciting and too low end), Asda has the ability to bounce back. But a blinkered price strategy won’t be the answer.

Asda customers driven solely by price were always going to be the most promiscuous; their loyalty the most wanting of the Big 4 grocers. Perhaps new marketing campaigns will focus more on a re-invigorated overall offer at Asda, emphasising its points of difference.

Asda has a great clothing brand albeit somewhat too disposable for many, it has a broad range of non-foods at great price points, and it has some great sites, still some of the busiest grocery retail spaces in the UK.

Asda has plenty to work with, yet it has much to do to re-emerge as the sum of its parts.

superdry store

Weathering fashion sales

Last weekend we were out shopping for shorts, by mid week we were seeing umbrellas front and centre in store, and this weekend, well watch the skies to find out.

The weather is such a major influence on retail sales that we are surprised more retailers aren’t insulating themselves against its changeability. And it’s not just fashion. Marks and Spencer launched their Spirit of Summer range only weeks ago and will have basked in its success last weekend. This weekend, well it’s at 10% off for Sparks customers. Coincidence?

Overcast sales

We have seen some highs and lows over the last two weeks in fashion; Next reported a damp start to the year coupled with slashing its full year guidance for the year, while Supergroup have bucked the trend and reported robust trading. Sainsburys also reported a very healthy growth in its clothing range, TU.

There are too many factors to categorically say why one retailer is trading better than another, but branding and seasonality must play a significant role.

Insulating sales

SuperDry has invested heavily in its branding, marketing it as a global lifestyle brand, extending the range and hitting the right note with their core customer. It has core products that are available all year round. It also has limited ranges for high season. The global nature of SuperDry means that there is a constant need for short sleeved t-shirts somewhere in the world, so availability and stock management is easier albeit the stock could be in the wrong hemisphere.

TU at Sainsburys has built on the Gok label, appealing to the Sainsburys customer. But so has Next invested in brand, and extending its appeal with adding other branded goods to the Next Directory. Tu, with its space and range limitations in store will be more seasonal, jumpers giving way to beachwear. At pick up prices and knowing that stock doesn’t keep coming in, the customer is more likely to buy it when they see it and save it for later.

More at play?

There is one other factor to consider; Lord Wolfson at Next warned that there could be an underlying decline in clothing demand at play. Or a shift away from the middle ground perhaps? The grocers could be getting better at availability, fashion-ability and branding, and stealing some of the high street fashion sales.

Asda is reporting its Q1 next week and George has been at the forefront of grocer’s clothing offers for years. If we see a lift in George clothing sales, which will be highlighted particularly if grocery reports weak trading again, then could we be about to see another shift in the fashion landscape?