Coronavirus: Purchases May Never Be The Same, M&S Says

0
59


A customer walks past the M&S storefront

Image copyright
Getty Images

Customers “may never shop the same way again” after the coronavirus crisis, said the boss of Marks and Spencer.

“While some customer habits will return to normal, others have changed forever,” said Steve Rowe.

The virus has brought about changes, including a shift to online shopping and an accelerated change in the way shoppers use High Street stores, he said.

T-shirts, bras and bathroom products had record sales, while he sold almost no suits or ties.

The impact of the virus has resulted in “effects and aftershocks” in the retail industry that “will last for the next year and beyond,” he added.

M&S was already undergoing a transformation plan led by its chief executive, Steve Rowe, which included cutting costs and closing certain stores.

  • Marks & Spencer cafes will reopen to take out
  • Marks & Spencer Expands Home Delivery Service by 30 Minutes

The firm said that due to the pandemic, these measures would be accelerated as part of a program called “Never The Same Again”.

These include purchasing clothing from fewer major suppliers, reducing the range of clothing and household goods, as well as “replacing aging stores.”

“The trauma of the Covid-19 crisis has galvanized our colleagues to secure the future of the business,” said Rowe.

“The digital trend has accelerated and changes in the shape of the main street have been highlighted. Above all, work habits have been transformed and we have discovered that we can work faster, lighter and more efficiently. “

His comments came as M&S said profits for the year to March fell more than 20% to £ 403 million from £ 511 million the year before as its clothing business grew. difficulty continued to struggle.

Sales of clothing and household goods fell 75% in the six-week period ending May 9.

Food sales also fell 8.8%, although M&S said many of its Simply Food stores were trading strongly.

Ocado mooring

Last year’s results for the retailer reflect its purchase of a 50% share of the retail business from online supermarket Ocado for £ 750 million.

Rowe said Ocado’s solid performance during the foreclosure “further enhanced” the value of the deal for the delivery of groceries.

The retailer will partner with Ocado from September this year, replacing the existing online grocer’s agreement with Waitrose.

M&S announced Wednesday that more than 1,000 non-food items, such as clothing and furnishings, will also be available for delivery through its merger with Ocado.

Image copyright
New

Legend

M&S has signed a food delivery partnership with Ocado


Neil Wilson, chief market analyst at Markets.com, said: “Covid-19 has accelerated many consumer trends and it may well be the catalyst to accelerate the transformation of Marks and Spencer into a 21st century retailer.

“In particular, it seems like M&S has learned how important the web is – so it’s about making its Ocado business more central to the business. “

Clothing competition

In recent years, the company has faced increasing competition from fashion giants such as Primark on the main street and Asos.

In the year ending March, M&S said clothing sales were down 6.2%, while food sales were up 1.9%.

To make matters worse, M&S ‘non-food stores were forced to close as part of the foreclosure measures.

As a result, he faces an “increasing backlog of unsold inventory” in his warehouses, he said.

The firm said the foreclosure measures, social distancing and declining consumer demand were “likely to continue throughout the year,” adding that the coronavirus pandemic means that its performance over the course of next year are difficult to predict.

He is working on a scenario that assumes a turnover of £ 2.1 billion over the next year for clothing, home, food and international sales.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Overall, M&S was facing challenges before the coronavirus and these were simply exacerbated.

“In the difficulties, there are also real opportunities, and the group seems to have a lot of good ideas, but the next chapter must really be about execution. “

LEAVE A REPLY

Please enter your comment!
Please enter your name here