Sky’s Paul Kelso says COVID-19 has given the retailer the opportunity to correct past mistakes and accelerate its online focus.
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In May, Marks & Spencer (M&S) outlined its strategy to cope with coronavirus and, where possible, to capitalise on any “learning” the pandemic might present to “accelerate transformation” and squeeze three years of pain into one.
The plan was euphemistically titled ‘Never The Same Again’, and life is certainly about to change permanently for the 7,000 employees who, we learnt on Tuesday, will lose their jobs before Christmas.
The latest cull of staff is a consequence of underlying problems accelerated by coronavirus, and an unashamed policy of not letting the crisis pass without taking the opportunity to cut the business down to size.
Many of M&S’s challenges are common to other High Street veterans, of which it happens to be the best known.
It has a huge number of shops in town and city centres that were already struggling to keep up with a new generation of more savvy consumers and has failed to keep pace with the shift to online retailing, a process that has hastened during lockdown, with £3 in every £10 now spent virtually.
Last year it announced 110 stores would close and, while it made no mention of more to follow, it cannot be ruled out.
Coronavirus crisis: Retail worst hit in UK economy
The company’s clothing division, the subject of apparently endless hand-wringing and celebrity-led rebrands, continues to perform poorly, down 38.5% overall in the last 13 weeks and 48% in-store.
In contrast, its food is considered ready-meal royalty, with sales actually increasing in the first three months by 2.5%, a process M&S hopes to enhance courtesy of a delivery tie-up with Ocado that will go live next month.
The job losses will not be confined to its stores but 16% will come from the shop floor where staff will be expected to work across food and clothing, while some middle-management is replaced by technology.
Chief executive Steve Rowe described the redundancies as “an important step”.
It is unlikely to be the last as he struggles to slow Marks & Spencer’s retreat from the first rank of British retail brands.