Marks & Spencer is building on the foundations left by Steve Rowe and taking important steps for serving customers better and securing growth, writes George MacDonald

Stuart Machin

Stuart Machin said M&S is taking control of its food supply chain ‘for the first time in history’

At his head office desk, new Marks & Spencer chief executive Stuart Machin keeps a calendar that tots up how many days he has been in post.

In the morning, or when the day is over, he asks himself what he has achieved. It is emblematic of his determination to make a mark at the business since his promotion earlier this year; to make sure every day matters and to drive the business forward.

It was unsurprising that faster and better were two themes of Marks & Spencer’s investor day this week as the retailer seeks to further power the momentum it has built up over the past few years.

During that time, including when the pandemic hit, the retailer made big changes to its operations, whether through the adoption of a digital-first strategy – particularly in clothing and home – or the launch of new-style food halls, pioneered by Machin when he was in charge of the grocery division. 

The strategic presentation to City analysts on Wednesday brought no big change in strategy. That in itself was reassuring, showing confidence that there is plenty of opportunity to be realised on the foundations laid by Machin’s predecessor Steve Rowe and chair Archie Norman, and successfully executed by Machin and Katie Bickerstaffe, now co-chief executives.

Execution remains key as M&S enters a new phase of “reshaping” for growth, comprising everything from “structural cost reduction” – the first thing mentioned by Machin and sensible as the cost of doing business rises – through to faster churn of the estate to better premises and more food space, and improving digital engagement with shoppers, allowing them to be served better, by enhancing the Sparks loyalty programme and app.

A step forward

A good example of a business improvement that will also save money, assuming all goes to plan, is the acquisition of food logistics partner Gist.

The deal, for an initial £145m in cash, was completed a couple of weeks ago. In Machin’s words, it “marks a step forward in our multi-year programme, which will transform our entire supply chain”, giving M&S control of its food supply chain “for the first time in history”.

That allows M&S to make efficiencies and, vitally, removes the costs of being a customer, rather than the owner, of Gist. It is expected to benefit M&S by an annualised £50m.  

“The supply chain has typically been seen as the less glamorous side of retail, but the past few years have shown how central a role it plays in success”

The business is opening more food space while reducing that devoted to clothing and home, with the objective of adding 1% to its grocery market share and achieving a margin of about 4%. The Gist purchase should help it achieve that.

The supply chain has typically been seen as the less glamorous side of retail, but the past few years have shown how central a role it plays in success: whether by enabling the switch to online during the pandemic or helping mitigate the impacts of driver shortages and freight costs. 

It is representative of the nuts and bolts without which retail’s engine would not run, so it was good that such details – far from the shiny food halls – are high on Machin’s agenda.

In the end, all those executional changes and improvements are made with one end in mind: to make more money by better catering to consumers’ needs. 

As Machin turns the pages of his calendar, he will be counting down the days to greater growth, looking to see progress on the various initiatives underway. 

If a little bit of worthwhile change is made every day, the coming years should mean a stronger M&S emerges on the other side of the present volatile times.