M&S in good shape, but tougher times lie ahead

If he didn’t know already, this is the week when Marc Bolland will have discovered what running Marks & Spencer is all about. A trading update on Wednesday, facing the eccentric army of private shareholders at the AGM the same afternoon, and then the summer party – which had become something of a gathering of the stars under Sir Stuart Rose – last night.

Retail Week goes to press too early to report on whether the usual unique mix of partygoers, from Sir Philip Green to Christopher Biggins, was out last night. But M&S feels a more earnest place these days as the new man gets to work with the zeal of someone who means business.

It’s too early to judge Bolland’s various initiatives. After making a quiet start with six months shadowing Rose, he has stepped on the gas with a raft of senior appointments – most notably the inspired hiring of Laura Wade-Gery to spearhead its multichannel drive – and the bold decision to return to Europe as a multichannel retailer in France.

What was most interesting about the solid if rather pedestrian first quarter update was the strength of M&S’s performance in the food market relative to non-food. M&S’s food customer is generally more affluent than its fashion shopper, which reinforces the view that it’s the less well off who have, so far at least, felt the pinch most.

But there are testing months ahead. As our ICM poll shows some of M&S’s core older shoppers are now beginning to really worry about their financial situation, and trading conditions are only going to get tougher. Melding the old and the new – both in terms of personnel and practice – in such a political organisation will be hard to do without some angst, especially as he’s made it clear he doesn’t think that all the investment under Rose – in stores for instance – was well spent.

But he’s right to be brave and take some risks. Like his successor at Morrisons, Dalton Philips, Bolland knows that in today’s fast changing retail environment, chief executives need to experiment and fly a few kites to find out what the future shape of their business will be. Not all will necessarily turn into big moneyspinners, but far better to try than to stick to the same old same old.

That’s what’s making M&S – along with Morrisons – the most exciting story among the legacy quoted retailers right now. The challenge that faces Bolland is to keep the core business sharp and responsive to customers while looking forward. Those retailers that succeed will be those who can keep one eye on the future, but the other firmly on navigating today’s tough trading climate.