Marks & Spencer is hailing the success of its ‘Never the identical Again’ transformation program to keep the brand on target to realize sustainable profitable growth.
Despite being struck by the persistent decline of the united kingdom main street, M&S has updated its profit forecast to the upper end of the previous guidance of £300m-£350m, assuming no further Covid-related restrictions are imposed on trading. The news caused the brand’s share price to leap today by quite 10% (20 August).
The company launched its cost-cutting program in May 2020 in response to a £201.2m pre-tax loss, as group revenue fell 11.9% to £9bn within the year to three April.
M&S strategy to sell rival brands marks the top of an era
M&S also noted a “good recovery” in its clothing and residential division, with revenue up 92.2% last year and down 2.6% on 2019/20. The retailer credits its successful shift to more focused ranges, fewer promotions, and a substantially smaller summer sale, which resulted in full-price sales rising 9% on 2019/20.
For M&S e-commerce popularity continues to grow. Clothing and residential online sales were up 61.8% on 2019/20, comprising 35% of total sales within the division.
Internationally the business is additionally on the up, with revenue rising 39.7% last year and down just 5.2% on 2019/20.
Branching out
In the trading update, M&S also called out the performance of both its Sparks loyalty program and wider go in third party brands.
First launched within the spring, the ‘Brands at M&S’ proposition is ready to expand online with the addition of an extra six third-party clothing and footwear brands –Craghoppers, FatFace, Albaray, Celtic & Co, Frugi, and Jones Bootmaker. The retailer is additionally trialing ‘Brands at M&S’ in-store displays in London, Glasgow, Kent, Cheshire Oaks, Manchester, and Gateshead.
M&S hails early success of Ocado tie-up despite major group loss
Aside from pursuing a 3rd party brand strategy in its fashion division, M&S’s food business has benefitted from its e-commerce tie-up with Ocado. The retailer acquired 50% of Ocado’s business for £750m in 2019, replacing rival Waitrose on the platform.
Chief executive Steve Rowe has since celebrated the “phenomenal” customer reaction to the venture, which sees M&S food products available to shop for online for the primary time…
Since the Ocado partnership went live, M&S’s share of the basket has reportedly exceeded the amount Waitrose achieved when on the platform, with the retailer’s lines consistently making up quite 25% of the Ocado basket.
To further spur on UK grocery sales, M&S funded and co-developed ITV show Cooking with the celebrities. the thought is to point out country public M&S are often a destination for the weekly shop, not just special occasions that decision for high-value items and treats. Throughout the program, which went continue to exist ITV in July, M&S ingredients and utensils are showcased to demonstrate the breadth of the range.
M&S marketing director for food and hospitality, Sharry Cramond told Marketing Week that one among the company’s big strategic priorities is to position itself as a destination where people they’ll do a broader shop.
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