CORPORATE FORTUNES

Significant Job Cuts At M&S As It Attempts Yet Again To Transform The Business

A person wearing a face mask makes their way past Marks and Spencer as they walk along Broadmead in Bristol, as face coverings become mandatory in shops and supermarkets in England. (Photo by Andrew Matthews/PA Images via Getty Images)
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By Emmanuel Oluebube, Correspondent UK

Substantial sacks are expected at M & S as it struggles to transform its business, Marks & Spencer Q1 Figures for 2020/2021 released August 18 confirms. 

Principal Retail Analyst at GlobalData, a leading data and analytics company, Kate Ormrod comments: ‘‘Having strived to turn around the business for so long, COVID and its resultant shopping habits have forced M&S’s hand to make more drastic changes, with headlines today focusing on the retailer’s history-making 7,000 job cuts over the next three months as it battles with the shift to online. A revenue performance ahead of its scenario plans is somewhat encouraging however given the trading turbulence experienced on the high street caution is rightly the overriding mind-set at M&S, especially given the hard work that lies ahead.

It is no surprise that Clothing & Home remains a drag on the business, as consumer desire for clothing in particular remains subdued by a sparse social calendar, with sales halving over the 19-week period, though the decline softened to 29.9 per cent for the last eight weeks. The contrast between stores and the online channel remains stark with C&H sales falling 47.9 per cent in those eight weeks, versus online growth of 39.2 per cent, resulting in online accounting for 41 per cent of sales. This digital penetration still remains behind rival Next however, and M&S undoubtedly has a harder road ahead to meet heightened shopper expectations when it comes to delivery, as it plays catch up. Though M&S has reported an extra 1.9 million C&H online customers in 2020, there are many more to entice online, particularly older shoppers, to repair its overall trading performance.

Food remains an outperformer, with 2.5 per cent growth over the eight weeks to 8 August, and l-f-ls (excluding the closure of hospitality and travel franchise units) rising 10.6 per cent. While its appeal prevails, aided by its investment in value for money, it has lost out to other grocers amid the pandemic. All eyes are on M&S’s venture with Ocado, which launches next month, as this will prove pivotal to the retailer’s attempts to move away from being a laggard to a player capable of real change.”

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