Mean & Stingy
MoS revelation that shareholders will LOSE their voucher perks unleashes a furious backlash – as retailer’s loyal army of shoppers brands it...
RETAIL giant Marks & Spencer has been hit by a backlash over its plan to stop distributing paper shopping vouchers to thousands of small shareholders from the end of the month.
Under a major shake-up, which will affect around half of the company’s legion of loyal small investors, the group is scrapping paper vouchers and replacing them with digitally dispatched discounts.
The sweeping changes will mean that investors who hold shares through a third party stockbroker or in an Isa account will no longer receive the vouchers which were launched in 2004.
The retailer will only distribute the perk to those investors for whom it has contact details through its appointed broker Equiniti.
Dozens of shareholders responded to The Mail on Sunday’s article last week revealing M&S’s decision.
One angry shareholder, who declined to be named, said he had lost ‘thousands of pounds’ on shares he bought more than 20 years ago.
He said cutting the vouchers after the slide in the share price – the worst in decades – was an ‘affront’. ‘Don’t M&S care about their small shareholders any more?’ he asked.
Wilson Chalmers, from Bath, said: ‘We are not happy about the lack of information from M&S on the switch. We have learnt more from your article than from the company that we partially own.’
He said he wanted M&S to ‘revert back to the original system’.
Investor Josephine Strong described the switch as ‘deplorable’. She said: ‘M&S must be saving a fortune, but it certainly has not enhanced its reputation.’
The company is unusual because it has vast numbers of small shareholders among its investors. Many are former employees or suppliers who have stayed loyal to the company for decades.
These shareholders account for 20 per cent of the company’s investors by value of their shares – more than £700 million. They are regarded as some of the most loyal in the stock market and were cited by the board as a key weapon in its armoury when it defended itself from a takeover attempt by Sir Philip Green in 2004.
The vouchers were launched as part of a commitment by the board in that year to ‘reward our loyal shareholders’ – then 320,000 individuals – after the bid was rebuffed. The discounts were worth almost £7million a year at the time.
The paper pack included 10 per cent off a single purchase, a bundle of Spend & Save vouchers for food and clothing and £2.50 to spend in any M&S cafe. Anyone with at least a single share was entitled to receive them. The pack will be replaced with a single discount voucher distributed online.
The company has argued that the changes will encourage shareholders to register directly with the company – or Equiniti – for digital communications and will mean the firm will be able to engage better with active shareholders.
M&S said: ‘We are undergoing a far-reaching transformation and our ambition to become a digital first retailer is at the heart of how we are changing.
‘This includes how we engage with our shareholders – ensuring that, as we change, we build longterm shareholder relationships supported by accurate and informed communication.’
The firm also cited ‘ever increasing print and mail costs’ and ‘declining voucher redemption rates’.
It is understood the firm previously sent boxes of vouchers to share dealing firms according to the number demanded by individual brokers. However, it said it could not track the vouchers and did not know how many were passed on or ultimately spent.
Accountant Anthony Shapiro, an M&S shareholder from Chelmsford, Essex, said the overhaul meant many shareholders have ‘been disenfranchised by M&S, not digitally engaged by them’.
He said: ‘My family have been shareholders in M&S since at least 1984 and I am profoundly disappointed.’ Shapiro said it was ‘Neanderthal’ that the firm could not find a more sophisticated method to communicate with all shareholders.
Many investors, chiefly those with shares through third-party brokers, said they had no idea they were eligible for vouchers until the situation was highlighted last weekend.
Clifford Pride, a retired businessman, said he and his wife bought shares in 2016 through Hargreaves Lansdown but were ‘not aware’ of the existence of the shareholder voucher scheme and had never received any.
Freda Pink, who is in her 60s and living in Surrey, and her partner David who bought several thousand shares in 2016 and 2017 through Halifax Share Dealing and Barclays also said they had not been given any vouchers.
‘We hope there are some positive developments from this,’ said Freda. ‘Fair compensation would be provision of the vouchers we’re entitled to plus some bonus vouchers.’
M&S said it communicates with more than 50 brokers which deal in its shares. These include Share Centre and Interactive Investor.
Many small shareholders said they have been sent vouchers by their broker or had contacted their nominees each year and were forwarded them. All of those contacted said they were very unhappy that this is destined to end.
One share dealing firm said only a ‘very small number’ of investors had requested the discount vouchers. It said those shareholders tended to be those who bought the ‘minimum number of shares to qualify’. They have been advised to switch to Equiniti if unhappy.
Hargreaves Lansdown said it had passed vouchers on to shareholders but could not comment on individual cases without full details of those affected. It said it would ‘need to look at individual cases’ before it could comment on why some appear not to have received the annual discounts in the past.
The firm said other corporations had systems in place to issue discount perks to shareholders.