Marks & Spencer has had a bumpy ride of late with its clothing business seriously underperforming in an increasingly competitive fashion market, while its food sales have also come under pressure over the past few years.
Long-running store restructuring and technology transformation programmes to improve productivity and drive its transition to a digital-first business have been accelerated as part of its ‘never the same again’ strategy from 2020, with the retailer looking to take at least 40% of clothing and home sales online over the next three years.
Associated costs have seriously dented M&S’ profits though, with the retailer slumping into the red at the pre-tax level over the 53 weeks to 3 April 2021 (FY2020) as the pandemic added to the pressures on the bottom line.
On a comparable 52-week basis, group sales fell 11.9% to £8.97bn in FY2020, as a near 60% rise in total online sales to £1.5bn failed to offset tumbling store sales. UK sales fell 11.3% to £8.38bn, driven by a 31.5% slump across clothing and home, while UK food sales dipped 0.6% and international revenue dropped 17.5% to £779.3m.
Famed for its food offer, after much speculation about how M&S could approach an online launch, in 2019 the retailer struck a joint venture partnership with Ocado. From September 2020, Ocado.com has been stocking M&S’s own-label food ranges among its 50,000 SKUs, taking M&S food online at scale for the first time.
Innovation rating: 3