Earlier this month Marks and Spencer reported that it will close more than 100 stores which will result in more than 1,000 jobs being lost. The plans are described as being a "radical transformation" to tackle years of falling sales and profits. Many of you will recall that in January 2018 Marks and Spencer announced that it would be closing a number of stores and that it had anticipated that this would alleviate some of its troubles. Other retailers who have announced store closures in the last few months include Mothercare, New Look and House of Fraser whilst the likes of Coast, Poundland and Gaucho (to name a few!) have gone into administration or been rescued by a CVA (company voluntary arrangement).
However, with a number of stores already closed and with profits still tumbling, are store closures enough to enable Marks and Spencer to survive or is something more required?
As the cost of running retail outlets have continued to increase and with demand decreasing retailers have struggled to maintain profitability and experts are anticipating store closures nationally to rise from 18,442 in 2018 to 22,100 in 2019.
So what is it that retailers need to do to increase consumer demand?
There has been a recent focus on the enhanced shopping experience, an affiliation with a brand and a need to create a connection with customers. Initiatives such as interactive social media in stores, personal shoppers and cafes within stores are some of the experiences that retailers are introducing in their stores to make them stand out and continue to attract consumers.
It was recently reported that WHSmith, Joules and Hotel Chocolat are seeing rising profits and successes as a result of efficiency and by focusing on more profitable ranges. WHSmith now sell fewer lines yet profitability is soaring whilst Joules and Hotel Chocolat have found different ways to reach out to retailers by not only focusing on physical stores but adopting a "multichannel" business model, viewing its online and in-store sales as one. Hotel Chocolat opened more than 15 new stores in 2018 and its growth is set to continue.
In contrast, surveys demonstrate that the likes of Marks and Spencer have failed to keep up with brand quality and people are no longer able to relate to the premium retailer that it once was.
With consumers demanding a better shopping experience with an increasing focus on service and wellbeing brands such as Marks and Spencer will need to do better than closing shop doors to turn around their businesses and to ensure that they avoid the need to restructure!
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