Credit: M&S

M&S can't give up on clothes just yet

The retailer's non-food sales are still in the doldrums, but it needs to remain more than a posh supermarket.

by Jack Torrance
Last Updated: 04 Nov 2015

It seems Marks & Spencer's supposed turnaround in clothing sales was short-lived. After reporting decent quarterly growth in its 'general merchandise' category back in April, today the retailer was back to its familiar like-for-like pattern of growth in food, decline in clothes. It's a pattern that's haunted chief executive Marc Bolland for most of the time since he took over in 2010.
Of course, its market update didn't quite put it like that. Apparently like-for-like growth of 0.3% in food is 'excellent' yet a like-for-like decline of 0.4% for general merchandise equates to 'broadly level.'  Work that one out. 'The hard numbers show that Marc Bolland's much touted recovery in General Merchandise has come off the rails once again,' said retail consultant John Ibbotson of Retail Vision.

Admittedly overall general merchandise sales were up 0.2%, but there's only so many new stores you can open - especially when, it seems, nobody wants your clothes anymore. Online sales haven't exactly been soaring in the last few years either – although they were up 38.7%, M&S itself admits that was against a particularly 'soft' comparative last year.

The differing performance of its food and clothes is rather striking. M&S has been well-placed to take advantage of middle class shoppers ditching the 'Big Four' supermarkets and searching out something a little more refined. It's capitalised on that by opening an increasing number of 'Simply Food' stores since 2001, but it's not time for M&S to give up on clothes for good just yet – for a couple of reasons.

Firstly the market for groceries isn't all that fresh. Though M&S might have the edge on blander offerings from the likes of Tesco and Sainsbury's, its consumers still demand good value and won't tolerate poor quality. Throw in the direct competition from Waitrose and specialist grocers and it's clear M&S needs from a fallback option for when times get tougher sometime in the future.

It probably wouldn't go down so well with investors either. Though it's been declining for a while, general merchandise still racks up £4bn of sales, or 43% of all M&S's UK revenues. Even if it continues to grow, it will be a long time before M&S's food business can replace that.

There's no easy fix though – Bolland can't force the general public to like the clothes he is selling. Under his leadership M&S clothes have undergone a series of revamps and branding exercises, but while a few 'hot pieces' like this year's suede dress have captured some attention, that's not been enough to turn things around.  

'Whilst Marks and Spencer are to be applauded for attracting great press for one or two key pieces each season, the fanfare does not translate through to sales,' says Phil Dorrell,  partner at consultants Retail Remedy. 'These pieces rarely have the distribution or stock to be able to deliver anything more than column inches.'

Bolland has the unenviable task of facing investors at the M&S AGM today. More than a few people will be wondering if it could be for the last time.

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