News, Culture & Society

ALEX BRUMMER: Covid has taught M&S the need for online transformation

The creation of two chief operating jobs at Marks & Spencer for Katie Bickerstaffe and Stuart Machin, and a strategic role for finance director Eoin Tonge, inevitably will excite speculation that succession planning has begun.

Against a background of a fading and different presence for department stores on the High Street, chief executive Steve Rowe believes the time is right to focus on restoring M&S to its former greatness, rebuilding growth.

Ahead of its annual results next week M&S could claim to be a recovery play. The shares have almost doubled in value after hitting a year-low last October and, with a market value of just over £3billion, could be knocking on the door of a return to the FTSE 100 in the next year.

Recovery: M&S shares have almost doubled in value after hitting a year low last October and with a market value of just over £3bn could be knocking on the door of a return to the FTSE100

It has a huge amount of ground to cover to get near again to soaraway Next, worth £10billion. 

As the person in charge of food, Machin is going to be required to do some heavy lifting as M&S plans to give more space to grocery in existing stores as well as opening new outlets.

It believes that, with some 6,000 lines, most available on its jointly owned Ocado platform, there is real room for expansion with an emphasis on quality.

The pandemic taught M&S the need for online transformation. Bickerstaffe will have a role in speeding up store-picking and click and collect, with ambitious targets to service customers with rapid turnaround times as quick as 30 minutes.

There is to be much more alignment between online and in-store marketing. Fashion, clothing and homeware ranges that are doing well on screen will receive prominent display in stores.

Technology has long been a lacuna for M&S, which spent billions on platforms which failed to catch the zeitgeist. 

The pandemic has changed the mindset and Rowe, with help from chairman Archie Norman, could yet earn a reputation as the ‘comeback kid’ before beating a retreat.

Good job

The run-down of furlough is the big uncertainty overhanging Britain’s jobs market, with up to 4m workers still in the scheme.

Nevertheless, a positive trend is unmistakable. Fears at the start of the pandemic that unemployment could surge to 10 per cent of the workforce proved to be baloney.

Joblessness fell to 4.8 per cent in March, far lower than in the eurozone. All measures are improving, including the claimant count and payrolls, which climbed sharply in the first lockdown.

Partly, this reflects a rise in the economically inactive – those who have decided not to look for work.

Vacancies are on the rise and the main complaint from the hospitality industry as it reopens is shortages of skilled staff, partly as a result of some EU workers departing these shores.

The most dismal projections now are of the jobless rate topping out at 6 per cent. Experience in recent years has shown the UK is good at creating jobs.

The difficulty is the mismatch between jobs available and the skills required, along with regional differences. Those may take longer to sort out.

Earnings growth of 4 per cent can be expected to trend down as younger people are reabsorbed into starter jobs.

Movie sequel

Covid-19 and the lockdowns were a godsend to Netflix, Amazon Prime and the neophytes to video and film production.

Netflix already has acquired Hollywood’s historic Egyptian Theatre and now Amazon is in line to buy private equity-controlled MGM, the home of James Bond.

Realignments in the entertainment space have everyone competing for advantage. What is being learned is that telecoms, entertainment and sport are not the best bedfellows. 

AT&T’s adventure with Time Warner has turned out to be as big a flop as AOL Time Warner two decades ago.

Here in the UK, BT is seeking a divorce from sport as, in a similar fashion to AT&T, it focuses on full fibre and 5G networks.

At least in entertainment Netflix and Amazon won’t have it all their own way. Disney has acquired 104m subscribers for its streaming service, Disney+, in record quick time. 

The Warner Media merger will also create a formidable new force although one with a shedload of debt. Amid these giants ITV might look an easy target.

But the niche Britishness of its key offerings, from Coronation Street to Love Island, improves its independent survival chances.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.


Find local lawyers and law firms at