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Banking on bricks and mortar: the future of M&S stores

Amid its radical store-closure programme, Marks & Spencer has opened a new store in Cornwall, and still considers bricks-and-mortar retail “incredibly important”. Can its new approach get the business back on track?

In November 2016, Marks & Spencer CEO Steve Rowe unveiled a five-year transformation programme aimed at returning the business to growth, which included a hard look at the productivity of its store estate. 

Central to the plan was reducing the number of full-line clothing and home stores it had in the UK by 60, through a combination of closing some and transforming others into its Simply Food fascia. 

By May 2018, Rowe had accelerated the store closure programme – revealing plans to shutter up to 100 branches over four years. He later said this number would likely rise as M&S catches up with its competitors and implements an approach of “constant churn” across its store portfolio. M&S had 259 full-line stores in October 2019, out of a total of 1,031 in its portfolio – down from 304 in 2016. 

But alongside the store closures, M&S has also been exploring potential new locations – seeking “more inspiring stores in places where customers want to shop”. 

On 23 October, the retailer opened a new store at Kingsley Village Shopping Park in Cornwall, its first full-line opening in the south-west since 2009. The two-storey, 68,000 sq ft shop offers clothing, home, food and beauty, and has its own cafe and in-store bakery. 

Bricks and mortar is still an incredibly important arm of the business

Sacha Berendji, Marks & Spencer

“The Kingsley opening forms a key part of M&S’s transformation programme and sits bang in line with our strategy,” Sacha Berendji, retail, operations and property director at M&S, tells Drapers. “Bricks and mortar is still an incredibly important arm of the business, and our transformation programme will ensure that the whole estate is in good, easy-to-access locations. 

“Kingsley represents the future of that. It is in an ideal location, with easy access from the main road and convenient parking, which is imperative for all of our stores moving forward.”

Alongside the new shop’s focus on a “contemporary” store environment and a shift in product focus, Berendji highlights improved in-store technology, including a new app for staff, as key elements. 

The shopfit is to the latest M&S specification, and follows its store at Northamptonshire’s Rushden Lakes shopping centre, which opened in 2017. The design includes a clean, minimalist shop floor, and each area is clearly signposted to make shopping as simple as possible. Gone are the racks upon racks of clothing – instead the space is uncluttered, and products are organised by category and trend. 

There is also a strong focus on lighting, and the store itself was designed to make the most of the building’s windows and allow as much natural light in as possible. Combined with the neutral colour scheme of beige and light grey, the overall effect is much more refreshing and welcoming.

Berendji adds: “Renewed elements include a modernised layout, which is easy to shop and accessible for customers. We have also placed greater emphasis on our ‘hero’ ranges, such as women’s denim and knitwear, and our recently relaunched Per Una brand – all of which have stand-out areas and a vast product offering.”

For convenience, there is a click-and-collect area on the ground floor. All shop floor staff have access to a hand-held Honeywell device that allows them to search for product, check stock, place orders and load customers’ M&S Sparks loyalty scheme offers.

As a response to the growth in cross-channel shopping, “we’ve given out more devices than normal to help facilitate a seamless shopping experience”, Berendji explains. “We’ve also given the store manager more autonomy to localise the offering. Kingsley is a tourist hotspot so, come summer, [the  store manager] can react to trends and customer demand.”

The new store is located just off the A30, the main link road from Exeter in Devon to Cornwall, in a bustling tourist area with plenty of parking. It appears to tick the box of being in a location where M&S customers “want to shop”. But are the “right” locations alone enough to salvage the retailer’s estate and revive the business?

It would make sense to focus on retail parks, which is where it performs

Jonathan De Mello, Harper Dennis Hobbs

Jonathan De Mello, head of retail consultancy at property services firm Harper Dennis Hobbs, believes that M&S is right to focus on the size and position of its bricks-and-mortar stores: “It needs to have a much leaner estate, with fewer stores in better locations. At the moment, M&S has hundreds of stores dotted around the country – many of which are small and under-performing, and play no role in its future. 

“I think it could trim its UK portfolio down by between 300 and 350 stores, which would allow it to create a much more prominent portfolio and focus on the sites that continue to generate sales, such as Marble Arch and Camberley [in Surrey].”

De Mello points to the fact that the retailer’s high street stores are often in historic buildings that are not always fit for today’s modern retail requirements, and suggests that M&S should shift its focus.

“M&S makes most of its money at retail parks, not the high street,” he says. “These stores are typically bigger, have better product ranges and are more convenient for shoppers. It would, therefore, make sense to get rid of more of [the high street stores] and focus on retail parks, which is where it performs.” 

M&S does not make public its breakdown of sales by store format or location.

The strategy can only be designed by the product: the estate must fit the product, not the other way around

Retail analyst Richard Hyman

Another source, who holds a senior position at a retail property services firm, agrees, and believes that M&S’s future estate “cannot be stuck in big old-fashioned high street stores, which are unattractive for consumers and have inflexible space and no parking”. Instead, he too believes that M&S needs to relocate more of its high street stores to retail parks and ensure that new spaces are bright, airy and modern, and in convenient locations.

However, retail analyst Richard Hyman questions the strategy: “Given that clothing still delivers more than two-thirds of M&S’s business, it’s very interesting that it is closing so many clothing stores. 

“M&S’s clothing has been on a downward spiral for years. It doesn’t matter what [store] format they put it in: if there’s been no investment in product, then the in-store bells and whistles are pointless. The strategy can only be designed by the product: the estate must fit the product, not the other way around.” 

The long queues outside the Kingsley store on its opening day bode well, but it remains to be seen whether the new format will draw customers to the M&S bricks-and-mortar offering in the long term. Nonetheless, in its choice of location, shopfit and product selection, M&S is at least attempting to make good on the long neglect of its store estate. 

 

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