Marks & Spencer (M&S) faces a growing threat in its food and home departments from the John Lewis Partnership, whose Waitrose chain and John Lewis Home concept are expanding fast and appealing to M&S customers, according to Verdict analyst Maureen Hinton.
Despite the rise in M&S’s quarterly sales, the retailer must “define a strategy to beat off this threat otherwise its market share in both these sectors will be continually undermined.”
Commenting on yesterday’s M&S’s results, Hinton said: “As the largest clothing retailer, and a significant player in the food and grocery sector, M&S is a good bellwether for the mood of the UK shopper and its performance has reflected the trends in consumer confidence and the general economy during the recession.
“With this in mind, the prospect of significant job losses in the public sector over the next year impacting many of its shoppers, and taking into account it will be up against much stronger comparatives over the next three quarters, it is unlikely to continue on such a strong trend.
“That said it is well positioned to take advantage of price inflation in clothing, as shoppers are looking for garments that justify higher price points in terms of styling and quality. M&S can challenge the top end of the high street and the premium/luxury brands, by providing its customers with a premium clothing offer at lower prices than they would have to pay elsewhere.”
