Feasting on a better future
BARNES in posh south-west London may not be a typical Marks & spencer food hall. On a visit last sunday, pandemonium reigned and one might have imagined that Britain’s traditionally favourite shopping destination was dispensing food for free.
even in M&s’s near two decades of struggle and decline, grocery outperformed the dreary fashion and homewares offering.
However, the current food performance is leaving everyone else in the dust.
same-store grocery sales in the 13 weeks to the end of December climbed 9.9pc, placing M&s top of the nourishment class.
Indeed, December 22 was the best pre-Christmas food shopping day in its 140-year history, with turkeys and party treats walking out of the stores. and it doesn’t appear to have stopped in mid- January.
as for clothing, it too is on a roll. Chairman archie norman’s policy of erasing corporate grandeur and reshaping the store portfolio is working admirably. In stuart Machin he has a creative and listening chief executive capable of taking M&s back to its glory days. But there is still some way to travel. Progress has been marked by a doubling of the share price in the last year, providing some room for profit-taking in latest trading.
Investors and M&s colleagues, looking forward to some big payouts under a generous share save scheme, have prospects of more to come.
The Ocado joint venture is underwhelming but Machin is convinced it can be turned around. Overseas operations, in the Gulf and India, are disappointing and there is scope there for care and attention.
The real opportunity is the roll-out of ever more food outlets and the upgrading of the big stores portfolio.
new premises, in a more fashionable site in Liverpool, have demonstrated how turnover can be ramped up several times over. Imagine if that could be done in other major cities, including the crumbling jungle that is M&s’s highest performing shop at Marble arch in London.
Its decision to take the next route and add gloss to its fashion offering with brands such as Jaeger has provided panache.
There could be more improvement with a stronger focus on in-house brands Per Una and autograph. Maintaining the momentum of innovation clearly is the key.
M&s lost its status as the UK large scale retailer with the highest price- earnings ratio long ago. On current trends there is no reason to think it can’t be recaptured.
Club class
TESCO boss Ken Murphy might have reason to feel aggrieved that M&s garners so much attention.
after all, in one of the most competitive grocery markets in the world, with no-frills retailers aldi and Lidl kicking down doors, Tesco shows remarkable resilience.
Its food market share of 28pc holds firm, its premium range is going like blazes and the muscle power it has put behind cheaper Clubcard pricing is paying off handsomely.
The nation’s top grocer is becoming the next of food retailing with its regular upgrades of profit prospects. In the six weeks to January, same-store sales were up 6.8pc and in the third quarter by 7.9pc.
It now expects profits to hit £2.75bn this year. The group has travelled a great distance from the dark days of the unwise foray into the Us West Coast and sloppy accounting under Philip Clarke.
This does not mean it is all plain sailing. The Competition & Markets authority doesn’t much like aggressive Clubcard pricing and may rule it a restraint on trade.
The focus on Britain, engineered by Murphy’s predecessor Dave Lewis, has worked well. The goal of Tesco earning half its revenues overseas is long gone.
Time for refreshed ambitions.
Crypto farce
BITCOIN meets none of the tests of a true currency. It is not a store of value, it lacks the historical confidence which underpins gold and has only marginal use as a medium of exchange.
el salvador’s 2021 decision to make it legal tender has done nothing to spread its use. Court rulings left Us financial enforcer the securities & exchange Commission with little choice but to approve the launch of publicly quoted exchange traded funds.
I would rather chance my arm with Bet365. at least some of the cash ends up in charitable hands.