New Marks & Spencer CEO Marc Bolland had to do something, having promised shareholders he would spend the best part of his first year on a ‘strategic review’ of the company.
And he’s just taken the opportunity to say that he’s cutting forth fifths of the 400 external, mostly food brands former boss Sir Stuart Rose introduced into M&S food stores at the same time as announcing £378m of half year profits.
“But you’ll still be able to get Marmite,” he told relieved listeners to the Today programme.
In truth the external brands never looked like a very good idea; M&S food is either its own food or it’s rather pointless. And its food departments, and even standalone food stores, are too small to squeeze in more brands.
To add to its problems middle class grocer Waitrose has recently been plugging its own other brands offer, 1,000 of them on which it promises to match Tesco prices. M&S neither could nor should try to compete with that.
In other words just continue with stuff Rose was already doing or thinking about.
But the proof’s in the pudding, or rather the profits. Six-month profits of £378m, up 17 per cent on 2009, shows the Rose plan is working and Bolland would be a fool to change it.
His problems will start if UK consumers start to retrench again when the public service cuts really hit and VAT goes up to 20 per cent in January.
Bolland’s thoughts, strategic or otherwise, would be better turned to anticipating that. In particular, like other big retailers, he will be wondering if M&S can take the hit by absorbing the two and a half per cent VAT hike.
At the moment it’s like a high stakes poker game in UK retail land. Who’s going to play the big card first?