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Patience is wearing thin for M&S’s problems

Marks & Spencer is one of those great British institutions that everyone likes to complain about, but no-one really wants to see disappear.

However, patience is wearing thin with the retailer following today’s news of its fourteenth consecutive quarterly decline in general merchandise sales. The disappointing results seems to be down to three separate problems and none, I’d argue, has much to do with the strength or otherwise of its clothing collections.

The first is the warm October and November, which has been so well documented I can hardly bring myself to write “unseasonably high temperatures” ever again. This affected most of the high street, although, granted, other retailers emerged in a better shape (cue mention of Next).

Similarly, no-one can deny the level of promotional activity that occurred in December, which set a difficult backdrop for most retailers. Last January, Bolland blamed ‘unprecedented discounting’ for sluggish sales, so his insistence that M&S deliberately held back its level of discounting in December this year, which had an adverse impact on sales but helped margins, is commendable.

What is not excusable is the problems M&S had with its online operation caused by the disruption at its Castle Donington distribution centre. Endless surveys, research and reports all said time and time again that the battle this Christmas would be a logistics one. It should have come as no surprise to anyone, so why was M&S forced to delay deliveries of online orders by up to two weeks following unprecedented Black Friday demand?

It wasn’t the first time the retailer had reported problems with its multichannel offer, with complaints flooding in when M&S launched its new website in February last year.

As recently as yesterday, The Guardian was reporting that the retailer was still handling a third fewer items than expected at the distribution centre due to communication problems between the various systems it uses, compounded by record online sales.

Bolland admitted today that Castle Donington failed to cope with Christmas demand, but added that, since tweaking the system, M&S would be able to cope with any future “cyber day” in a professional manner from now on.

It is a shame these problems continue, as M&S seems to be getting its act together on the clothing side, with its spring 15 collection the most focused and relevant yet. But none of that will make any difference if customers continue to vote with their feet (or clicks) and take their business elsewhere.

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