Marks & Spencer: Customer loyalty comes to the rescueby
Marks & Spencer has turned in resilient first quarter revenues despite difficult times on the high street because its loyal customer base has "come to the rescue", an analyst has said.
Gemma Lovelock, managing director of retail specialist TLC Marketing Worldwide, told TalkingRetail.com that in today’s "stay-at-home culture", M&S was the "go-to brand", a fact that was reflected in the firm’s resilient food sales. It had introduced the idea of £10 meals for two and "they continue to rule Friday and Saturday nights", she said.
For the first quarter, M&S’s group sales (excluding VAT) rose by 3.2%, while UK-only revenues increased by 2.7%. General merchandise sales grew by 0.3%, with food up 5%. Like-for-like UK revenues were ahead by 1.7%, with general merchandise sales flat and food up 3.3%.
"The broader numbers are not mind-blowing, but they are stronger than many of its competitors and demonstrate an all-important resilience. M&S has a very loyal customer base and, in an ageing population, it is coming to its rescue at its time of need. Ranges such as Fashion Brights reflect how M&S is looking to broaden its appeal to a younger demographic," Lovelock said.
The next quarter would prove even more challenging for both M&S and the broader high street, however, as there were fewer Bank Holidays, no Royal Wedding and "no end of head winds, specifically reduced consumer confidence and lower disposable incomes through inflation", she added.
But the biggest problem of all was that there was "no end in sight", Lovelock warned. This meant that "even brands as established as M&S are not immune from the current economic challenges and it is right to remain cautious", she said.