Lower prices, reduced discounting and a focus on differentiating product were key to Marks & Spencer’s clothing turnaround over the Christmas period, as the retailer kicked off its “self-help story”, according to chief executive Steve Rowe.
Marks & Spencer’s 2016 Christmas advert
Clothing and home sales grew 2.3% for the 13 weeks to 31 December 2016, with the retailer increasing its market share in full-priced clothing, particularly in lingerie, for which the retailer now holds a 34% share. Customer satisfaction over the period reached a four-year high, including improved satisfaction scores for clothing products.
Rowe said sales across clothing had increased, as “wardrobe essentials, cashmere, thermals, men’s lambs’ wool and kidswear all performed well”, reflecting his strategy to focus on quality wardrobe essentials. The red dress featured in M&S’s Mrs Claus Christmas campaign was also popular, with more than 5,000 selling in the first three weeks after the advert was aired, while the cable knit jumper was also popular .
Lower prices were also credited for the clothing growth. Overall, Rowe said 2,000 lines across the store had been reduced in price on a like-for-like basis, including men’s shirts and underwear. “We saw full-price sales increases in every single clothing division,” he said. “Customers have picked up on the fact that we have better merchandise, better availability, better pricing.”
M&S became one of a growing number of retailers to turn its back on the Black Friday discounting trend, which Rowe also said helped drive strong full-price sales, as the retailer focused on lower overall prices, with less discounting. “We pulled back on Black Friday quite deliberately as part of our ’less discounting’ strategy and customers have been willing to pay a better, i.e. lower full price, for our products,” he said. This lead to what he described as a “more traditional” Christmas trading period.
Price increases as a result of the weaker pound were also ruled out “where practical and possible”, with Rowe saying M&S would focus on better buying and better sourcing, with fewer markdowns and more accurate initial pricing.
While Rowe said he was pleased with the results for the quarter, he was clear that they are part of the company’s wider strategy, saying there is “lots more to do at M&S”.
“The key thing is that this is a self-help story,” said Rowe. “We’ve got lots of things to do in the business, lots of things that need fixing, we’re on that journey. The team has worked exceptionally hard over the last few months to get that right and our customers are responding.”
Rowe warned that in the short term, strategic action within M&S would have a negative impact for the company. He also cautioned that numbers for the fourth quarter would be impacted by a later Easter and timing of Sale. He said: “We expect the market to be challenging and consumer confidence to remain uncertain but we are confident that our plan is the right one for M&S and remain focused on our strategic actions.”