M&S mulls waving Paris au revoir as stores are hit by Brexit red tape – Telegraph.co.uk

M&S has been one of the most vocal corporate critics of the Brexit-induced border disruption in Northern Ireland, having struggled to get English goods across the Irish Sea. It has warned about resulting price increases and shortages in the run up to Christmas in the region. 

In a letter to Brexit minister Lord David Frost in July, Mr Norman – a former Conservative party MP – said the EU customs arrangements were “totally unsuited and were never designed for a modern fresh food supply chain between closely intertwined trading partners”.

In a bid to make sure shelves are fully stocked the firm has this year been overhauling its supply chain and buying more food from countries within the EU. In the Czech Republic it removed all fresh and chilled foods from stores, replacing them with expanded ranges of products that have a long shelf life in order to fill gaps. 

Despite these efforts, however, the France division is still at risk. 

“We haven’t made a final decision, and will probably be making decisions shortly,” Mr Norman told LBC. “With the difficulties we have regarding trading in France, we’ve got to reshape that business. We are talking to our French partners about how we do that.” 

“We are getting about 80pc of our product through [in the EU], less than that in France because the French, predictably, are draconian and these rules serve no purpose at all. Our food standards are higher than the European Union and they have not changed since we were part of the EU – this is a pointless bureaucratic exercise,” he added.

Last year M&S’s international business incurred Brexit-related costs of £6.2m. The hit to its purse strings came as overseas sales were down 17.5pc to £789m, while total sales fell 11.9pc to £9.1bn for the year to April 3.   

Richard Lim, chief executive of Retail Economics, said that Britain’s departure from the EU has added another level of complexity to the franchise model – M&S’s modus operandi in France, thus making it “a bit more inefficient”. 

“Brexit and the pandemic has almost emboldened the senior management team to make those really difficult decisions, although arguably some should have been made before the pandemic,” he said.

Last year the 137-year-old retailer revealed 7,000 job losses as part of a wider effort to transform the business. Some of its recent changes seemed to be paying off, as demonstrated by a rare profit upgrade from company last month after years of dwindling sales

Mr Lim, however, warned that customer demand may start to wane. “M&S has been in a position where consumers have migrated towards parts of the sector that benefited them – food sold online, homewares. Whether that momentum starts to slow down, that’s a bit of worry for me,” he said.

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