M&S results inspire plans for the future

20th Nov 2015

Marks and Spencer’s (M&S’s) efforts to increase profits are starting to pay off, but general merchandise sales have fallen, the company’s half-year results reveal. Jo Causon, chief executive of the Institute of Customer Service, believes a long-term focus on service will help retailers such as M&S improve their overall performance in the next quarter.

The group beat forecasts for overall first-half profit and increased its dividend by 6.3%. Meanwhile, the retailer’s food division outperformed the market, with total sales up 3.3%. However, unseasonal conditions and the company’s decision to discount less in the second quarter affected general merchandise performance, with sales 1.2% lower on a like-for-like basis.

Despite signs of improved consumer confidence across the country, market conditions will continue to pose a challenge for M&S in both UK and international markets. In the face of such economic pressures, Causon argues that established high street names must not rely on a short-term approach to attract and retain customers. Instead, retailers should look to improve how easy they are to do business with over a sustained period. 

“Whether it’s on the high street or online, customers are demanding faster service, increased choice and better-quality goods as the price for their loyalty,” she explains. “Those retailers who respond with innovative ideas that put customer needs at the heart of what they do, making greater connections across the whole service experience and understanding personal needs, will be the ones to see performance, profitability and market share improve.”

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