The results are finally in, and what was suspected is now certain: Christmas was better than it has been for a while, but it wasn’t good enough.
That’s the verdict for Marks and Spencer certainly, which not only suffered another bruising quarter for clothing but has suffered the ignominy of falling food sales too. The fact that Christmas made it “better” only serves to underline the fact that all is not well at Marks – and even a celebrity visitor from darkest Peru can’t save it.
This time, however, it’s not just M&S that’s suffering. House of Fraser and Debenhams both struggled and, in the case of the latter at least, it’s hard to see an obvious solution. Even those who had a better time of it – John Lewis, for example – are hardly brimming with optimism.
For many quarters now, retailers have been on a knife-edge hoping that the supposed recovery would convert into cash but failing to see any real sign of it. With consumers facing the punishing environment of stagnant wage growth and pesky inflation, things are only going to get tougher.
Online, as usual, is where things look different, as evidenced by Boohoo’s results – another argument for levelling the playing field when it comes to business rates for bricks-and-mortar retailers.
But rates, levies and taxes are only one part of the story, and cost-cutting will only carry firms part of the way. In 2018, strategy will be more important than ever before. Knowing your customer, not the customer you want but the customer you have, is what will keep businesses going.
The fact Tesco has maintained market share is a sign that finally things might really be improving for the nation’s largest retailer and others should learn the lesson.
Debenhams must make a virtue of its position at the lower end of the department store spectrum, while House of Fraser should realise it’s more attractive to middle England than its children.
And critically Marks & Spencer must drop its obsession with fashionistas and get back to basics. Having identified “Mrs M&S” as his target, boss Steve Rowe has so far failed to woo her back to the fold. The clock is ticking and investors’ patience is running out.