- Q4 Food Like for Likes flat
- Q4 Clothing and Home Like for Likes down 2.7%
- Total group sales up 1.9%
As the end of his first week in his new role as M&S CEO ends, Steve Rowe has already ticked off a few things on the to-do list that send very clear signals to the city, the shareholders, the customers and the competition.
His week started in store talking to colleagues and customers. If there is one thing that Marks and Spencer has been accused of it is that it has lost touch with its fashion customer who have defected to Next, John Lewis and Primark for some of her wardrobe. Yet the customer flocks to the food hall.
With another decline in M&S Clothing and Home sales in Q4, we can expect Rowe to “kitchen sink” the full year results in May leaving him with a clean sheet with which to start his tenure as CEO. He has also said he will continue to oversee General Merchandise for the foreseeable future, clearly indicating that his focus will be on its turnaround.
It has become standard practice for new CEO’s bring out the dead, and leave themselves with a low base from which to grow. The downside are the problems that could be buried deep which can come out to bite you as Dave Lewis knows only too well. Rowe will have an opportunity to blame previous M&S leadership but somehow we suspect he will not do so. Instead he will be tenacious in his forward thinking; you cannot change the past, just learn from it.
So what of the future?
One of the first strategic reviews we would welcome from Rowe is a review of the M&S target customer. We are not talking about the customer that the business thinks it has, we are talking about the customer that visits the food hall. That customer has disposable income, is already frequently visiting stores and will find themselves brushing passed clothing. That customer can easily and inexpensively be acquired and converted with the right ranges.
The next challenge is availability. We know that M&S has had success with key fashion pieces that have been well publicised in the press. However the availability of those pieces was limited to the top few stores, so the marketing success is not translated into sales.
The quality price ratio is the next challenge that we want to see addressed. Great quality is what the M&S food business has been built on, and translate that into fashion, superior quality fabrics from sustainable sources, knits that don’t pill, buttons that stay attached, on fashionable ranges and M&S has an inherent value positioning that they can get back to.
The last strategic issue on Rowe’s agenda in our opinion is the bland stores. While some stores are modern, light and inviting some are still stuck in a time that fashion and modern retailing forgot. High level navigation is wanting in many of the stores we visit, compounded by the proliferation of in-house M&S brand messages. Range rationalisation and navigation can be addressed once the customer has been identified and space can be reassigned, perhaps giving food a bigger slice to better serve the customer.
We have a good feeling about Rowe, he has spent time in stores, has delivered food success and has started his first week in the best possible place, in stores with colleagues and customers. Here is to a successful few years delivering M&S back to its eagerly awaiting public. They have been very patient after all.