SIR STUART ROSE steps down as executive chairman of Marks & Spencer next month. Yesterday, he presented his last set of trading figures.
They showed a 4.6% rise in pre-tax profits to £632.5m for the 52 weeks to March 27, enough to lead Sir Stuart to sound even more bullish than normal. It’s clearly taken some skilful management to deliver that level of performance in the trading conditions that plagued our high streets last year.
Two of those strategies have taken M&S, under Sir Stuart’s leadership, into new territory.
The first, announced a while ago, but only implemented locally in the last couple of weeks, is the appearance in the chain’s food halls of goods under non M&S brands. So you can find Walkers crisps and Heinz baked beans alongside M&S own brand goods. It’s a brave move from a firm that has worked so hard to develop its brand as a benchmark for quality.
When it was announced, some brand experts struggled to see the logic. In corporate M&S speak, it was about extending customer choice.Š Research, they said, showed their shoppers to be very loyal. But it was a loyalty split between favoured M&S own brands and trusted non-M&S big brands.
The logic then went along the lines of making it easier for loyal customer in an M&S food hall to get their favourite goods.Š But what would happen, some wondered, when those same customers were confronted with goods from rival brands on the same shelf?Š
To judge by a quick, and unscientific, search of the shelves at one local M&S, there’s another interesting strategy at play. Like for like goods packed in M&S colours are cheaper than the big name offers from people like Heinz.
So,Š here’s M&S giving its customers the choice their research say they wanted – and playing to the strength of their own brand by offering like- for-like goods at a cheaper price.
If they have done their homework correctly, we could see Sir Stuart’s successor reporting a rise in sales of own brand food goods. That would be a remarkable achievement.
It may take another remarkable achievement to see M&S score success with their commercial link to England's World Cup Squad.
That depends to a great extent on the team’s success in South Africa next month when they are in their Umbro togs, rather than their M&S clobber.
