Retail Theory Practice Summative Assessment Report

RUNNING HEAD: RETAIL THEORY AND PRACTICE
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Retail Theory and Practice

Retail Theory and Practice
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Table of Contents
Introduction................................................................................................................................2
M&S...........................................................................................................................................2
Macro Environment...................................................................................................................2
Micro Environment....................................................................................................................4
Strategies....................................................................................................................................5
Retail theory...........................................................................................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9
Appendix..................................................................................................................................10

Retail Theory and Practice
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Introduction
Retail is the process of selling goods and services to customers for consumption rather than
for resale (Christopher, M., 2016). According to (Johnes, 2019), “retail is the sales of
products to consumers in relatively small quantities”. The clothing retailing industry in the
UK has been growing steadily as market value in 2019 was 69.6 billion Euros (Russell,2020).
There are several leading brands in the UK clothing industry that captured the market such as
New, Primark, Next, and M&S (Nash, 2019). The clothing retailing industry in the UK
moved towards e-tailing because 55% of sales shifted to online platforms in 2018 (Pantano
and Vannucci,2019). Due to that M&S was the biggest loser in 2017 as its sales dropped by
0.4 percent and its biggest competitor Next sales also dropped (Russell,2020). In upcoming
years sales through the online platform can reach $873 billion by 2023 (See appendix 1).
M&S
Marks & Spencer is a British multinational company and headquarters in London
(Marksandspencer, 2020). The company was founded by Thomas Spencer and Michael
Marks in 1884. Marks & Spencer offers high-quality home products, food products, and
clothing. The company is a leading player in the retail clothing industry and compete with
Next and H&M in terms of quality and design (Russell,2020). It was the first retailer to
make a £1 billion pre-tax profit in 1998 (Ancarani et.al, 2019). The company desire for low
prices and value and aim for development (Marksandspencer, 2020). The company’s profile
was raised because of its aggressive promotion strategies as the company featured many
famous stars this helped to raise the company’s profile in the UK market (Johnes, 2019).
The company introduced a campaign like “Leading Ladies” and featured figures like Annie
Lennox, Emma Thompson and Rita Ora (Jones and Comfort, 2019).

Retail Theory and Practice
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Marks & Spencer's vision is to provide or offers quality, service, and value to its customers.
In the UK, the company has 300 stores with wide expansion plans; the company operates 289
stores in the UK, 267 in Canada and 11 in Europe (Johnes, 2019). Further, their distribution
channel includes 70 suppliers and with that, the company is able to manage its logistics and
distribution. In 2019, the company showed a profit of £10.4 billion and its sale of clothing
increased by 22% through an online platform (Nash, 2019). Due to the shift of customers to
online platform the company closed 14 stores and another 86 stores are under investigation
and will be closed by 2022 (Russell,2020). This happened because of decreasing customer
footfall and corporate sales.
Macro Environment
Political Factors
In terms of Brexit,. The decision of the UK government to leave the European Union
impacted the retail industry as the cost of production may increase because of an increase in
tariff rates. (Ancarani et.al, 2019). M&S operations also impacted by these political decisions
as the company need to change its strategies in order to reduce the cost of production as due
to increasing tariff it becomes costlier for M&S to import raw material from parts of Europe
(Johnes, 2019). Hence, firstly because of these political decisions cost of production for M&S
will increase.
In terms of trade control, the second factor that impacted the UK clothing industry and then
on M&S is trade control as the UK government changed trade policies such as increasing
taxation on cross border trade (Ancarani et.al, 2019). This reduced the import of goods and
raw material required by retailers in the clothing industry and due to that overall growth and
contribution of the industry lowered (Johnes, 2019). This impact on M&S operations as the