Negative Impacts of COVID-19 on Financial and Operating Performance of Marks & Spencer

This report analyses the negative impacts of COVID-19 on financial and operating performance of Marks & Spencer. It evaluates the importance of financial and operating performance of business, analyses the impacts of COVID-19, and recommends strategies to overcome them.

RESEARCH PROJECT

Contents
1.0 INTRODUCTION..................................................................................................................1
Research aim................................................................................................................................1
Research Objectives.....................................................................................................................1
Research Questions......................................................................................................................1
2.0 LITERATURE REVIEW.......................................................................................................2
To evaluate the importance of financial and operating performance of business.......................2
To analyse the various negative impacts of COVID-19 on financial and operating performance
of Marks & Spencer’s business...................................................................................................2
The different strategies adopted by Marks & Spencer to overcome from the negative impacts
of COVID-19...............................................................................................................................3
3.0 RESEARCH METHODOLOGY...........................................................................................4
4.0 DATA ANALYSIS AND PRESENTATION...........................................................................5
To evaluate the importance of financial and operating performance of business.......................5
To analyse the various negative impacts of COVID-19 on financial and operating performance
of Marks & Spencer’s business...................................................................................................5
To different strategies adopted by Marks & Spencer to overcome from the negative impacts of
COVID-19...................................................................................................................................6
5.0 CONCLUSION AND RECOMMENDATIONS......................................................................7
Conclusion...................................................................................................................................7
REFERENCES................................................................................................................................8

1.0 INTRODUCTION
The COVID-19 corona virus pandemic has impacts the financial and operating performance
of various organisations. Moreover, they may propose to represents as well as describes these
impacts that is through involving both qualitative and quantitative information related to them
whether from outside or inside the financial statements. The aim of this report is to analyse the
negative impacts of COVID-19 on financial and operating performance of business. For this, the
selected company is Marks & Spencer, which is one of the leading multinational retailers that
mainly deal in clothing, home & food products. Its headquarters is in London, United Kingdom.
The topics which are going to be discussed in this report are research aim, objectives, questions,
and literature review. Moreover, the research methodology, data analysis and presentation are
also explained. Apart from this, some recommendations are also provided in this project.
Research aim
“To analyse the negative impacts of COVID-19 on financial and operating performance of
business. A case study on Marks & Spencer”.
Research Objectives
 To evaluate the importance of financial and operating performance of business.
 To analyse the negative impacts of COVID-19 on financial and operating performance of
Marks & Spencer’s business.
 To recommend the different strategies adopted by Marks & Spencer to overcome from
the negative impacts of COVID-19.
Research Questions
 What is the importance of financial and operating performance of business.
 What are the negative impacts of COVID-19 on financial and operating performance of
Marks & Spencer’s business.
 What are different strategies adopted by Marks & Spencer to overcome from the negative
impacts of COVID-19.
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2.0 LITERATURE REVIEW
To evaluate the importance of financial and operating performance of business.
As per the view point of Shen (2021), Operating performance may be considered as synergy
among several firm units and the competency to generate huge output together. Moreover, this is
also the level in which overall business departments collaborate to attain the particular business
objectives. While financial performance is a complete analysis of organisation’s whole standing
into classification like liabilities, expenditures, assets, equity, revenues and overall profits. So,
both are important of all organisations including Marks & Spencer. The key reason for being so
is that the financial performance of company states investors regarding their general well beings.
Additionally, this is a snapshot of their economical health as well as their management jobs is
performing by facilitating insight in future: either their operation & profitability are upon
appropriate tracks to develop as well as overview for their stocks or inventory. In addition to this,
operating performance is essential as this metrics measure which would evaluate the
effectualness and efficiency of manufacturing procedures as whole. Also, it is vital for all firm to
obviate ineffective one and develop profitability.
To analyse the various negative impacts of COVID-19 on financial and operating performance of
Marks & Spencer’s business.
As per the view point of Suparmin (2021), The various negative impacts of COVID-19 on
financial and operating performance of Marks & Spencer’s business are discussed below:
Lower productivity: productivity is a measure of how much all staff into entity generates a huge
productivity levels which states the average staff produces more. Additionally, this can vary for
various reasons but be apt to be lower into much labour intensive sector like wholesale, retail and
others. So, this directly or indirectly impacts the financial and operating performance of the
business.
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(Source: Which firms and industries have been most affected by Covid-19?, 2022)
For example: It has been analysed from the financial year 2019/20 outlook that the forecast
outrun for group PBT and other adjusting items, quarters to data have been impacted negatively
by virus. But this was into the range of market desires as well as into the line with guidance
issued in January. In addition to this, their food business have so far stayed stronger that
illustrates the resilience they drive from having combination of associated business within
singular umbrellas.
The different strategies adopted by Marks & Spencer to overcome from the negative impacts of
COVID-19.
As per the view point of Ismal (2021), The different strategies adopted by Marks & Spencer to
overcome from the negative impacts of COVID-19 are:
 Deferring capital responsibilities: There capital spend during the current year will come
in well beneath unique direction. Going ahead it are focused on just .£80m of arranged
capital consumptions in FY20/21 from a financial plan of up to £400m.
 Dealing with the expense base: They are redeploying associates from Clothing and Home
into Food any place down to earth and conceding all boosts in compensation.
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 Conceding or dropping optional spend: They are lessening trivial spending at all levels,
freezing unimportant enlistment and decreasing showcasing spend.
 Decreasing the stockpile pipeline by over £100m and holding over stock: With around
66% of our Clothing stock 'center' item we will go to remarkable lengths to hold over
stock (MARKS AND SPENCER GROUP PLC UPDATE ON TRADING AND IMPACT
OF COVID-19, 2022).
3.0 RESEARCH METHODOLOGY.
Research methodology is undertaken as the methods that depend on numerous practices of
research which are needed to be performed. Additionally, it is vital for investigator to undertake
the several prospects of research methodology in order to accomplish the anticipated outcomes.
In this, in order to conduct the research methodology both primary and secondary methods are
discussed:
Primary : This is described as the that aspects by that data is directly accumulated from the
researcher for the very initial time that is not yet gathered through any other individuals before.
Additionally, it is undertaken to be original information as well as be much particular towards
issues over that study is based on. Moreover, there are various manner by assistance of which the
primary data can be accumulated like interview, questionnaires and others.
Secondary: It is considered as the information that is gathered through some other individuals
before for performing its research that be similar to present investigation areas and currently
utilised through investigator for developing an understandings related to present study topic. In
addition to this, it is useful as this aids investigator to ascertain the research nature as well as also
guide the researcher regarding the direction over that the upcoming study should be represented.
Within it, the information is fundamentally gathered from the sources such as article, books and
others.
So, in order to perform the present study upon negative impacts of COVID-19 on financial and
operating performance of business secondary methods would be utilised. As in this the
information would be accumulated from online sources through evaluating the already published
information like articles, journals and many more. Also, this aids investigator to ascertain the
research nature as well as also guide the researcher regarding the direction over that the
upcoming study should be represented.
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4.0 DATA ANALYSIS AND PRESENTATION
To evaluate the importance of financial and operating performance of business.
This has been analysed that both financial and operating performance are important of all
organisations including Marks & Spencer. The key reason for being so is that the financial
performance of company states investors regarding their general well beings. Additionally, this is
a snapshot of their economical health as well as their management jobs is performing by
facilitating insight in future: either their operation & profitability are upon appropriate tracks to
develop as well as overview for their stocks or inventory. In addition to this, operating
performance is essential as this metrics measure which would evaluate the effectualness and
efficiency of manufacturing procedures as whole. Also, it is vital for all firm to obviate
ineffective one and develop profitability.
To analyse the various negative impacts of COVID-19 on financial and operating performance of
Marks & Spencer’s business.
From the above it has been analysed that there are various negative impacts of COVID-19 on
financial and operating performance of Marks & Spencer’s business but one of the huge impact
is lower productivity as the financial year 2019/20 outlook that the forecast outrun for group
PBT and other adjusting items, quarters to data have been impacted negatively by virus. But this
was into the range of market desires as well as into the line with guidance issued in January. In
addition to this, their food business have so far stayed stronger that illustrates the resilience they
drive from having combination of associated business within singular umbrellas.
5

To different strategies adopted by Marks & Spencer to overcome from the negative impacts of
COVID-19.
As per the above, it has been analysed that some of the effective strategies which are opted by
Marks & Spencer are:
 Dealing with the expense base: They are redeploying associates from Clothing and Home
into Food any place down to earth and conceding all boosts in compensation.
 Conceding or dropping optional spend: They are lessening trivial spending at all levels,
freezing unimportant enlistment and decreasing showcasing spend (MARKS AND
SPENCER GROUP PLC UPDATE ON TRADING AND IMPACT OF COVID-19, 2022)
6

5.0 CONCLUSION AND RECOMMENDATIONS
Conclusion
As per the above report, it has been concluded that COVID -19 has impacts the economy
and various organisation negatively. So, this has been also analysed that COVID-19 corona virus
pandemic has negative impacts on their financial and operating performance. Moreover, they
may propose to represents as well as describes these impacts that is through involving both
qualitative and quantitative information related to them whether from outside or inside the
financial statements.
7

REFERENCES
Books and Journal
Alameeri, K.A., Alshurideh, M.T. and Kurdi, B.A., 2021. The effect of covid-19 pandemic on
business systems’ innovation and entrepreneurship and how to cope with it: A theatrical
view. In The Effect of Coronavirus Disease (COVID-19) on Business Intelligence (pp.
275-288). Springer, Cham.
Anh, D.L.T. and Gan, C., 2020. The impact of the COVID-19 lockdown on stock market
performance: evidence from Vietnam. Journal of Economic Studies.
Devi, S., Warasniasih, N.M.S., Masdiantini, P.R. and Musmini, L.S., 2020. The impact of
COVID-19 pandemic on the financial performance of firms on the Indonesia stock
exchange. Journal of Economics, Business, & Accountancy Ventura, 23(2), pp.226-242.
Fu, M. and Shen, H., 2020. COVID-19 and corporate performance in the energy
industry. Energy Research Letters, 1(1), p.12967.
Ichsan, R., Suparmin, S., Yusuf, M., Ismal, R. and Sitompul, S., 2021. Determinant of Sharia
Bank's Financial Performance during the Covid-19 Pandemic. Budapest International
Research and Critics Institute-Journal (BIRCI-Journal), pp.298-309.
Rababah, A., Al‐Haddad, L., Sial, M.S., Chunmei, Z. and Cherian, J., 2020. Analyzing the
effects of COVID‐19 pandemic on the financial performance of Chinese listed
companies. Journal of Public Affairs, 20(4), p.e2440.
Shen, H., Fu, M., Pan, H., Yu, Z. and Chen, Y., 2020. The impact of the COVID-19 pandemic on
firm performance. Emerging Markets Finance and Trade, 56(10), pp.2213-2230.
Yusuf, M. and Ichsan, R.N., 2021. Analysis of Banking Performance in The Aftermath of The
Merger of Bank Syariah Indonesia in Covid 19. International Journal of Science,
Technology & Management, 2(2), pp.472-478.
Online
Which firms and industries have been most affected by Covid-19?, 2022. [Online]. Available
through: <https://www.economicsobservatory.com/which-firms-and-industries-have-been-most-
affected-covid-19.
MARKS AND SPENCER GROUP PLC UPDATE ON TRADING AND IMPACT OF COVID-19,
2022. [Online]. Available through: https://corporate.marksandspencer.com/media/press-
releases/5e0f046f7880b21924350282/marks-and-spencer-group-plc-update-on-trading-and-
impact-of-covid-19.
https://www.hl.co.uk/shares/shares-search-results/m/marks-and-spencer-group-plc-ordinary-1p/
financial-statements-and-reports
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