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By Ralph Robinson, Head of Retail & Consumer Markets, BJSS
It has come as no surprise that M&S has taken the decision to waive next year’s dividend. It follows on from last month’s decision to cut the final dividend payment for its 2019-2020 financial year. These measures combined will save the retailer c.£340m.
And whilst the market has reacted to this news – with its shares in the FTSE 250 taking a tumble this morning before an early afternoon fightback – what I’m really interested in is the announcement that the pandemic has caused a very different way of working and rapid learning for all levels across this 163-year-old retailer.
M&S has also taken the bold decision to go to the market and declare that an accelerated transformation will radically change how it works and operates. The programme, dubbed ‘Never the Same Again’, will permanently change the ways that M&S has traditionally worked.
But what does this mean? Well, for one thing we can expect a bolder M&S in the future. This is being driven by the pandemic. The retailer is using it as a learning opportunity; reflecting on what it has done but, more importantly, what it needs to do in the future. For anyone aware of the internal workings of the business, this is a huge step change.
So what, in all likelihood, will the programme look to deliver? I think it will look to enhance, improve and transform M&S. It has, like all retailers, had a number of shocks due to COVID-19; safeguarding the health and safety of its employees, grappling with unparalleled and highly volatile demand and the rapid lockdown and transition to a remote workforce across its operations and technology teams.
At BJSS, we believe that M&S will prioritise the following three areas:
All this is pure conjecture at the moment. But what is clear is that by going to the markets and outlining what it will be focusing on, M&S already understands the value of taking onboard the lessons. By taking the same actions that other organisations have - leaning into transparent communications and looking to adapt and evolve to remain resilient and relevant - M&S will get over the impact of this pandemic.