Speaking ahead of M&S interim results (due Tuesday 5th November), Mintel’s Director of Retail Richard Perks said:

“Few company results have been so eagerly awaited as those due from M&S on Tuesday 5th November.”

Performance of womenswear is critical

“The results will cover the three months to the end of September. We know that the food side of the business has continued to perform well.”

“In womenswear, we know that the first two months of the quarter were poor, continuing the trends of the Spring /Summer season. The merchandise which failed in the early part of the season was very unlikely to see any improvement at the end of the period.”

“The new Autumn ranges were introduced at the end of August and so were in the stores only for the final month of the period. These were the first ranges to be produced under the leadership of Belinda Earl and they were launched with considerable PR fanfares.”

“The only indication of the success of these new ranges comes from recently published market share data and it suggests that M&S continued to lose market share in September. The rate of sales decline was marginally less than in July/August, but we know from Next that the market grew more strongly in that month. The mid-season sales also seemed to be deeper and earlier than usual.”

Expect to see some room for improvement

“If sales have improved in the revamped stores, then the company will be quick to say so. But to our eyes there is still too much to do and the performance of a small number of key stores is not a guide to the long term performance of the business.”

“We do not think that the sub-brands are sufficiently differentiated. A few key pieces that have excited the fashion press are not enough to generate the sort of sales uplift that we need to see from the group.”

“There is not enough to appeal to younger customers. M&S has the oldest customer base of any of the leading clothing retailers. But it needs to constantly refresh it by attracting younger customers if it is to avoid ageing with its customers (as we have seen with both C&A and Littlewoods in the last 25 years).”

“That said, Mintel’s research shows that the M&S brand remains highly trusted (49% of UK consumers think this to be the case), authoritative (11%), provides good service (48%) and it has a loyal customer base. If the retailer can get its womenswear offer right its customers will clearly be prepared to spend more.”

Where next for the business?

Mintel think that M&S’ analysis of its shortcomings and what it needs to do is correct. It must:

Give each of the sub-brands a much clearer identity
Modernise its stores and improve the presentation of the merchandise.
“The newly refurbished stores look very much better and the online strategy is excellent, especially in the way that M&S has tried to bring the online offer centre stage within the stores.”

“But it is the implementation not the strategy which is at fault, especially in the merchandise and however great the stores look and however good the online strategy, M&S will not reverse its fortunes unless it can attract women to buy its clothing.”

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