M&S Loses More Market Share as Price Gap With Rivals WidensGabi Thesing
Marks & Spencer Group Plc was the only major clothing retailer to lose U.K. sales and market share in the six months through mid-May and the price gap with rivals widened, according to Sanford C. Bernstein.
The U.K.’s largest clothing retailer’s share declined 0.4 percentage points to 10.8 percent, the ninth consecutive drop, Sanford said in a note today, citing data that’s not publicly available from researcher Kantar Worldpanel. Sales resumed their decline, falling 0.7 percent in the period, from being flat in the previous six months, the data shows.
Even with two collections under the stewardship of a new design team headed by former Jaeger Chief Executive Officer Belinda Earl under its belt, “M&S has not yet done enough to change the perception of its brand,” Jamie Merriman, the Bernstein analyst, said in the note.
M&S Chief Executive officer Marc Bolland is under pressure to stem declining sales at the retailer after spending 2.3 billion pounds ($3.9 billion) over the past three years on improving stores, revamping the crucial women’s wear offer and reinventing the online business -- so far without translation into higher profit as customers defect to cheaper rivals.
Marks & Spencer’s clothing is now 22 percent more expensive than those of competitors, up from a 20 percent average in the previous period surveyed, Bernstein said.
The company lost 0.5 percentage points market share among its core customer group of women 55 years and older and 1.2 percentage points in its target 35-54 age group, Bernstein said, citing Kantar.
Executives are now pinning their hopes on a new autumn-winter fashion collection which will arrive in stores in July and comes with assurances from the retailer that it had learned from last year’s mistakes, when an iconic pink coat was only available in selected stores and sold out within weeks.
Inditex SA’s Zara was the biggest winner in the survey among 15,000 shoppers with a 27.5 percent gain in sales, followed by online retailer Asos Plc.