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Recent media reports have shown that Marks and Spencer has finally seen a return to profit with underlying profit before tax rising by 6.1% to £661.2 million while group sales edged up 0.4% to £10.3 billion.
These profits are being attributed to the positioning of its Simply Food range, however its fashion and general merchandise have also returned to profit..
With reports that M&S is going to continue to expand its Simply Food range with a predicted one thousand stores by next year, is M&S on the right track to keep profits soaring?
With much publicised changes in their key management team, the company has long been trying to change the perception of its brand and widen its appeal. However, what has been clear in the past few years is that it has not listened to its customers, as we explored in our previous blog. Is this change in fortunes evidence that it is listening to its customers and is now building a strong platform from which to re-establish itself as a fashion leader in the UK as well as a leading food retailer?
Core to every retailer is its understanding of its customers and what they are looking for from its products. Most retailers undertake ongoing research, looking at the customers and their competitors to understand how the market is changing. This is not solely focused on products, but also the retail environment, how and where customers want to shop, do they want to shop online or are they after the complete retail experience. With M&S online sales down by 2% over the year this is indicative that the new company website presented a bigger challenge for its customers than originally thought.
Many have long been of the opinion that M&S doesn’t understand its customers, for several years fashion sales have not been successful and digital engagement with customers has lagged behind competitors such as John Lewis In recent news. However, since the Rag trade brothers Neal and Mark Lindsey were brought out of retirement to help change the shape of the fortunes of the M&S clothing range, this investment seems now to be paying off.
The big question now is will this work and allow M&S to continue its revival?
FSP is the leading expert in retail, both in the UK and internationally, with vast experience in pre-acquisition, retailer location strategy and market and retailer analysis. For more information on any FSP services, contact us on +44 (0) 1494 474740 to find out more.
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