Founded in 1884, Marks and Spencer is the oldest retail store based in England dealing with products such as food, household products, clothing, etc. The brand has faced quite the upscale during its century long existence and is now a household name in the United Kingdom. However, in recent times the company has announced the closing of many of its stores.
Below is a PESTLE analysis of Marks and Spencer. It will cover factors relating to political, economic, sociocultural, technological, legal, and environmental factors of the retail giant, and propose certain market predictions as well.
While free trade policies have been a massive political benefit for Marks and Spencer and its almost 1500 overseas stores. But with the Brexit hanging close, many of these policies may soon no longer apply to the company. It is expected that the Brexit will be followed by certain hard placed tax embargos which will affect all brands shipping out of England. Thus, Brexit may lead to heightened production costs for Marks and Spencer. If the United Kingdom truly falls apart, Marks and Spencer’s overseas outlets will have to either shut down or increase their prices thereby losing customers.
While Marks and Spencer is indeed a retail giant, the current market trend in the UK is shifting towards smaller retail stores. These stores provide a lower markup price thereby allowing Marks and Spencer to retain a premium status.
However, the majority of the population in the UK is taking to their preferred local retail store rather than Marks and Spencer’s premium products. Budget stores are a direct threat to Marks and Spencer’s target market and the brand has not been able to devise a means of combating this threat.
Marks and Spencer is a household name, but due to its longstanding existence it is not what one calls a brand of the youth. Most of the population associates the brand with the past and without a top to bottom revamp of the business persona Marks and Spencer is projected to lose a majority of customers from the latest generations.
The brand has however been able to counter this factor by dominating the ready meals industry. There has been a sharp rise in the consumption of ready meals all over the UK and the world as well. Marks and Spencer is currently one of the top providers of ready meals within the UK.
Modern day retail stores are changing and adapting new technology. The introduction of self-checkout-based retail and food joints is something that has really taken to current industry. Marks and Spencer has introduced multiple such self-checkout stores and plan to increase the usage of AI based checkout in the future.
Alongside this they also have established an eCommerce store that is quite effective within the UK. All their goods can be found on the website and thus people can save time by shopping at Marks and Spencer. This form of adoption of new technology may help the brand make a stronger presence amongst the current generation.
Over the years Marks and Spencer has been involved in multiple legal disputes. These legal disputes have made it hard for the brand to hold its image at a constant stature through its century long existence. The recent legal dispute with Frascati landlord was one such dispute. The change in Britain’s trade laws post Brexit will be another legal factor that will affect the brand hugely. This is something that a business strategy will not be able to elevate.
Marks and Spencer promote themselves as a luxury brand, and due to this they are highly concerned about the environmental effects that the brand leaves behind. They have promoted the concept of sustainable retail industry on multiple occasions and vows to be careful about their production processes. With the current climate crisis at hand this move from Marks and Spencer has been highly regarded and various other retail brands in the UK have followed suit.
Marks and Spencer also sell fair trade products. These allow smaller retail businesses to incur less production cost and thus enable environmentally friendly production methods.
Concluding PESTLE Analysis Of Marks and Spencer
It is very unlikely that despite these various issues Marks and Spencer will ever go out of business. Brexit of course will be a massive decisive factor for the brand, but even if its overseas operations lessen it will be performing within England at the same business pace as usual. However, change in policies is expected post Brexit.