New Marks & Spencer chief executive Marc Bolland has been urged to focus on getting the company’s food business back on track when he joins the company next week.
Bolland’s first day in what is arguably the toughest and highest profile job in retail is next Tuesday, and the Dutchman is expected to take his time getting to know the business before making any major decisions.
“It needs to become famous again for innovation and prepared foods,” said Collins Stewart analyst Greg Lawless, who expects the former Morrisons man to “tackle the food business first because that’s what he knows”.
Oriel Securities analyst Jonathan Pritchard said that while the M&S food business is “showing signs of life” he expects Bolland to “accelerate the food recovery process. At Morrisons he got everyone pulling in the right direction and that’s what he needs to do first at M&S too”.
However, some experts warned that making major changes could be difficult while Sir Stuart Rose is still in place as chairman. “Food needs a root and branch evaluation but it will be difficult for him to do anything meaningful while Stuart is still there,” said long-time M&S critic Tony Shiret of Credit Suisse.
In its fourth quarter M&S delivered its sixth consecutive period of improved food performance, with UK like for likes up 1.8%. However, this month’s grocery market share figures from Nielsen showed a levelling out of the improved performance while deadly rival Waitrose continues to grow share strongly.
Arden Partners analyst Nick Bubb argued that M&S’s food business “has been doing better lately because it has been discounting”. He said: “He needs to reconcile the value proposition with the pricing strategy. Restoring price credibility may cause some short-term pain but it needs to be a priority.”
The performance of general merchandise has strengthened significantly, with M&S growing its market share strongly. However, Bolland will still need to get his head around the clothing businesses. “When he arrives he needs to ask Kate Bostock [clothing boss] what the difference is between the brands, and who buys what. At the moment it’s over complicated and is trying to be all things to all women,” Bubb said.