M&S to cut 950 jobs as Covid-19 keeps shoppers away

M&S to cut 950 jobs as Covid-19 keeps shoppers away
Hundreds of Marks and Spencer staff in Cork are left in limbo today as thousands of jobs are being slashed in the UK. It is not yet known whether this will affect jobs in Ireland. photo: Damian Coleman

Marks & Spencer plans to cut 950 jobs in the UK as part of a store-management revamp, dealing a further blow to a sector ravaged by the Covid-19 crisis.

The job cuts affect the UK and not stores in the Republic, a spokeswoman said. However, it is unclear whether stores in the North are affected by the plans. 

Already this month, health and beauty chain Boots and department store group John Lewis have said they will likely shed over 5,000 jobs between them after the pandemic accelerated the shift to online shopping.

Britain’s retailers were already struggling with high rents, business taxes, tight margins and preparations for Brexit even before they were hammered by the coronavirus lockdown.

Marks & Spencer, which has a UK workforce of 78,000, said it had started a consultation with its employee representative group and set out its intention to first offer voluntary redundancy to affected workers across central support functions, central operations and property and store management.        

Shares in M&S were down almost 1%, extending 2020 losses to 54%. The 136-year old group has been seeking to reinvent itself anew after a decade of failed revivals.

M&S said in May the pandemic would indelibly change its business and that it would accelerate its latest turnaround effort, which included cost cuts and store closures. It labelled the programme “Never the Same Again”.

It said the changes would reduce management layers and free up retail teams to focus more on customers.

“Through the crisis we have seen how we can work faster and more flexibly by empowering store teams and it’s essential that we embed that way of working,” said Sacha Berendji, M&S’s director of retail, operations and property.

Meanwhile, shopper numbers in Britain have failed to sustain the immediate growth that followed the reopening of hospitality and leisure businesses in England on July 4 when coronavirus lockdown restrictions were eased, industry data showed on Monday.

Researcher Springboard said shopper numbers, or footfall, across all retail destinations in the UK increased by 4.5% in the week to July 18 from the week before.

That compared to growth of 10.6% in the week to July 11. 

“Last week demonstrated that the longed-for flood of shoppers returning to bricks and mortar destinations and retail stores once again became a trickle,” said Diane Wehrle, Springboard’s insights director.

All of the rise was driven by high streets and shopping centres, where footfall rose by 6.8% and 4.7% respectively, while it declined by 0.7% in retail parks.

Ms Wehrle noted that while the extent of the rise in footfall from the week before was not as significant as hoped, it was enough to reduce the year-on-year decline to 40%, which was the most modest since the start of the lockdown.

Earlier this month UK chancellor Rishi Sunak said the government would encourage trade by funding discounts on eating out on Mondays, Tuesdays and Wednesdays in August, and also slashed Vat for the hospitality and domestic tourism sector. 

Reuters and Irish Examiner

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