POPULAR SHARES

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THERE’S only one reason to like Marks & Spencer as an investment now, and that’s the fact the price is pretty bombed out, so shares are cheaper.

But like items in the sale, a low price doesn’t always equate to good value. High Street footfall is declining as more of us turn to our mobile phone to make purchases rather than the nearest shopping centre, and M&S was late to recognise the importance of a strong digital offering.

Until recently, declining sales in the clothing and home division had been offset by strong performance from the M&S food business, but now that’s gone into reverse too.

As well as traditional rivals such as Tesco and Sainsbury’s, M&S Food is up against a new breed of online competitors such as Hello Fresh, Deliveroo and Just Eat. These providers present a particular threat to M&S, seeing as many of its customers are buying a quick meal for that night, rather than a full weekly shop.

Management recognises the issues but it looks like a long road to recovery. On the way, the retailer has to fend off competitive pressures and hope Brexit doesn’t deliver a hefty blow to UK consumers.

The share price already reflects a weak and uncertain outlook, but investors who see M&S as a bargain buy will still need strong nerves and an awareness things might get worse before they get better.