Marks and Spencers have announced plans for seven thousand job losses over the next six months. But what does it mean for retail and for M&S?
It means that Marks and Spencer is accelerating its transition from a ‘Clothing and Housewares and Food’ retailer to a Food retailer. It also means that the demand for very large retail units is probably going to continue to decline.
What it means for M&S
Now you’ll have heard this story of change and renewal before, as M&S has seemingly been in a state of permanent transition for the last decade or so.
This change will have significant implications for their larger stores, as M&S moves towards more and more smaller shops in either areas of high footfall or close to high value customers. It means the remaining fashion (and to a lesser degree ‘housewares’) business M&S still serves is up for grabs by other retailers – our demand for clothes and household goods isn’t just going to vanish after all – but it’s probably going to be filled by other retailers.
You can see a situation where M&S only sells clothes in their largest stores, or stops being an anchor store in shopping malls and becomes a regular, albeit one of the larger, tenant.
What it means for the high street
Increasingly you do have to wonder what’s the future for retail anchor stores – is there one? Marks and Spencers sits in a slightly strange place where in many locations it is one of the main anchor stores in the area – but in many more it’s just a small supermarkets or small mixed retailer.
What I think we’re going to see are some fairly radical and fairly rapid shop format changes, with retailers using the Covid-19 recession as an opportunity radically change their property portfolios and how and where they sell to the public.
Large stores won’t become obsolete – but many will become under-used, and many will change uses entirely.