In recent years, it is fair to say that Marks and Spencer has somewhat fallen out of favour with British consumers. While the brand’s food division remains relatively popular, the chain’s clothing line has experienced falling sales and criticism from experts in the fashion industry due to what has been called an “uninspiring” offering.
Yet although UK consumers remain disenchanted, Marks and Spencer has experienced a growing popularity in its international market. Leading the boom in sales is emerging economy India, where the 129 year old brand has benefitted from a growing middle class and buoyant economic status.
In fact, Marks and Spencer revealed in its half year results that total sales in India had climbed by 28 per cent and that like for like sales had similarly increased by a “double digit percentage”. This compares extremely favourably with the relatively low 8 per cent increase in sales for the overall international arm of Marks and Spencer, and indicates that further expansion in India could be extremely profitable.
It is perhaps for this reason that chief executive Marc Bolland has made the decision to make India the retailer’s largest market outside the UK by 2016, growing its commercial property portfolio within the country to 80 stores. At present, Marks and Spencer operates 36 stores in India, including its largest flagship store in Mumbai which opened earlier this week.
This move ties in with Mr Bolland’s three year plan to turn Marks and Spencer from a traditional high street chain to an “international multichannel retailer.” Since his appointment as chief executive in 2010, he has increased spending in online developments as well as opening stores in countries such as France and China.
Mr Bolland believes that Marks and Spencer has the potential to become a market leader in India’s retail industry and will therefore be focusing on aggressive expansion as a priority.
He says; “India is a priority market for Marks and Spencer and working closely together with our partner Reliance Retail we have set a clear plan to build a leadership position here.
“As the nation’s leading retail operator, Reliance Retail is the perfect partner for us in India with extensive local expertise and experience, with strengths in infrastructure, logistics, technology and property – this combined with Marks and Spencer’s brand loyalty and exceptional quality, stylish products, has seen us continue to deliver strong double digit growth in India.
“Now with 36 stores, we have the ideal platform to accelerate our growth in the market and see India become our largest international market outside of the UK by 2016.”
With international economies now looking to grow rather than simply remain stable, it seems that now is the ideal time for multinational retailers to examine their options when it comes to expansion. However, Mr Bolland must be careful to walk a delicate line – should he focus too much on Indian growth, there is a risk that he could see the delicate consumer demand in other large markets decline.
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