STUART Rose, the chief executive of Marks & Spencer, will come under renewed pressure this week to outline a fresh vision for the High Street chain to get its faltering strategy back on course.
Rose’s impressive turnaround of the company has ground to a halt in recent months amid a worsening consumer downturn and a row about his elevation to executive chairman.
Rose is expected to deliver profits just shy of £1bn but weakening shopper m
orale due to rising living costs and a loss of market share in its food division have introduced doubts about a sustained recovery at Britain’s largest clothing retailer.
In January the company posted its worst quarterly performance in two years.
Attention will focus on the clothing business following a gloomy sales update from Next two weeks ago.
M&S is the UK’s biggest clothing retailer by value and volume, and analysts forecast a 3.6% fall in like-for-like general merchandising sales, as well as a 1.5% decline in food sales.
Nick Bubb, retail analyst at Pali International, said: “Last month was pretty atrocious for both food and clothing and the first six weeks of the year have been quite bad.”
He added: “We have had just a bit too many excuses from Stuart and he needs to focus on what he can control, tell us how he can pull the food division out of its long term decline and stop losing market share.”
Food now accounts for 50% of sales due to the rapid expansion of Simply Food – M&S’s convenience format. But sales have failed to keep pace with rival supermarkets and are still heavily reliant on the increasingly unfashionable “ready meals”.
The company is reviewing its food business as it struggles with heavier competition, and could unveil changes such as more product innovation and a decision to sell non-M&S products for the first time.
Another analyst said: “I am quite cautious as Stuart got it wrong in the Christmas quarter by panicking in the run up and slashing prices. The other issue is food. They have been forced to broaden their offering and create an internet arm, but it is a very high risk strategy.”
Consensus forecasts put pre-tax profits at around £989m – against last year’s £965.2m. But the employee bonus scheme is likely to be cut from £91m to about £20m.
Rose is also likely to give an update on international expansion after the company announced plans to open its first store in China and make moves into India.
The full article contains 438 words and appears in Scotland On Sunday newspaper.
