Forget the Champs-Élysées: British consumers have lost their joie de vivre

THERE was much fanfare last week when Marks and Spencer returned to the Champs-Élysées in Paris. But even if the French flock to the British retailer in droves, which seems somewhat improbable to us, their joie de vivre isn’t being shared by domestic customers. Like-for-like sales in the fourth quarter are expected to be off by six per cent.

Bulls are sure to point out that M&S is fighting against incredibly tough comparatives, after sales in the same period last year jumped by 9 per cent. And they will also point out that Mother’s Day, Easter and the Royal Wedding, which all fall in M&S’s next quarter, will provide a boost next time round.

That might be so, but the medium to long-term outlook is uncertain for M&S, as it is for most retailers. Spiralling inflation stoked by higher commodity prices, higher taxes, constrained consumer credit and fear over public sector cuts are about to combine to create a lethal brew.

Most retailers, with the exception of those who have fallen by the wayside, have had a remarkably good recession. Sadly for the likes of M&S, that can’t last.
david.crow@cityam.com