forbes.com
M&S Chairman: Grocery E-Commerce Unprofitable, But M&S Turnaround Shows Promise
M&S Chairman Archie Norman revealed that grocery e-commerce is largely unprofitable, contrasting this with M&S's successful turnaround achieved through major cultural changes and strategic decisions, while also highlighting challenges in online ventures, cafe operations, and international expansion.
- What are the key challenges and opportunities facing grocery e-commerce, as evidenced by M&S's experience?
- Marks & Spencer's (M&S) chairman, Archie Norman, declared grocery e-commerce unprofitable, citing significant wealth destruction in online food ventures. He highlighted M&S's Ocado partnership as a 'rollercoaster,' showing 13% annual growth despite shareholder skepticism. M&S is completing a £750 million payment for this venture, despite reported performance issues and legal threats from Ocado.
- How did M&S's cultural transformation contribute to its turnaround, and what lessons can other struggling retailers learn?
- Norman's comments reflect a broader trend of unsustainable online grocery models. He contrasts this with M&S's successful turnaround, achieved by significant cultural changes involving replacing 80% of top management. This involved difficult decisions prioritized over quick wins, a strategy he attributes to their current success.
- What are the potential long-term implications of M&S's strategic decisions regarding its loyalty program, cafe business, and international expansion?
- M&S's future success hinges on its ability to leverage data from its Sparks loyalty program for personalized marketing, while navigating challenges in its cafe business and potential US tariffs on its Percy Pig sweets. The company's non-food focus and premium positioning may mitigate some of the grocery sector's pressures.
Cognitive Concepts
Framing Bias
The article presents a largely balanced perspective on M&S's transformation under Archie Norman. While it highlights Norman's views and success, it also acknowledges challenges, such as the strained relationship with Ocado and the ongoing need for cost-cutting. The headline, if present, would influence the framing, but the body text itself presents a balanced narrative.
Sustainable Development Goals
The turnaround of M&S demonstrates positive economic growth and job creation, impacting Decent Work and Economic Growth. The company's recovery involved significant changes in leadership and personnel, ultimately leading to improved performance and financial stability. This reflects positive impacts on employment and economic activity.