PESTLE Analysis for MARKS and SPENCER

Introduction

Marks & Spencer is a British retailer with over 800 stores in more than 30 countries
around the world. It is the largest clothing retailer in the UK, as well as being a food
retailer. Most of it’s domestic stores sell both clothing & food, and since the year
2000 Marks & Spencer have started to expand into other ranges such as home wares,
furniture & technology.
Marks & Spencer became the first British retailer to make a pre-tax profit of over £1
billion “BBC News online 1998” Though a few years later Marks & Spencer were hit
by the “credit crunch” which has had a dramatic effect on the company as they
struggle in the current economical climate.

Political Factors
The government sets regulations for companies to abide by such as Health & Safety
British Standards such as, planning for hazard identification, risk assessment and risk
control. If companies do not abide by these regulations they will be fined or even in
some cases be forced to close down. Marks & Spencer did not abide by the British
Standards as they were charged for neglecting health & safety regulations after a door
fell on an employee. George Blair was allegedly injured after a warehouse door in
their store at Braehead, near Glasgow was left hanging on loose fixtures. Marks &
Spencer are alleged to have ignored repair requests, allowing the door to fall into
disrepair. Marks & Spencer pled not guilty to this; there is still no outcome of this
trial.
Also according to “BBC News 30th January 2006” Marks & Spencer would be the
first major retailer to go down the Fair-trade route on both clothing and food. The fair-
trade policy, which they have launched will include, cut salt and fat in M&S foods,
recycled packaging and animal welfare protection. Marks & Spencer Chief Stuart
Rose stated, “Customers want good value, but they care more than ever how food and
clothing products are made”.

Economical Factors
Currently the economic outlook is very uncertain and this is more than likely to affect
retail sales, as people do not have the spare cash to spend on luxury items such as
clothing and food luxuries. Marks & Spencer have been hit by this and have recently
closed a number of stores and have had to make job cuts of 2% of their 70,000 staff.
And also to show what affect the recession has had, they took the decision to have
two days of 20% discounts in the run-up to Christmas. They have also recently
introduced a 20% of all Wine and Champagne to keep up with their competitors.
Marks & Spencer have had to change the way they market themselves so that they can
try and stay ahead of the recession.

Sociological factors
In the last few year’s society has changed. In 2006 as stated by the Guardian, Chief
Executive of Marks & Spencer Stuart Rose wanted to stretch the company brand, for
example he considered selling food online as part of a plan to become a multi-channel
retailer, this was obviously to keep up with the competitive market such as Asda.
Asda and Marks & Spencer appeal to different markets in terms of social class and
other demographics; this has a major influence on the way they respond to current
issues.
In response to the current cheap clothing industry supermarkets have increasingly
over the last few years caught up with fashion trends, helping them to rival the high
street clothing stores with their less expensive versions. Marks & Spencer is no
exception to this and they have bought their clothing ranges up to date to keep up with
the latest trends and to keep their customers interested. Consumer purchases are
influenced by cultural, social, personal and psychological characteristics. For the most
part, marketers cannot control such factors, but they must take them into account.

Technological Factors
Technology is vital in the retail market. Companies must manage their brands
carefully. First the brands position must be continuously communicated to consumers.
Major brand marketers often spend huge amounts on advertising to create brand
awareness and to build preference and loyalty. For Marks & Spencer to continuously
communicate to consumers they need to be heavily into advertising, which they are.
They have Celebrity icon Myleen Class as the Face of Marks & Spencer who appears
on the adverts on the TV and she is also on their website modelling the M&S
clothing, also other M&S girls include Twiggy, Erin O’Connor and Noemie Lenoir
too, so their adverts appeal to women not only in their 20’s but also to the more
mature lady so they are covering all areas with their advertising campaign. Also their
website is very appealing with bright colours and very easy to use, it is also constantly
updated with the new M&S brands.

Legal Factors
Legislations are always changing. Marks and Spencer carry out re-training & update
every year, they keep up to date with new laws or legislations, and with issues
regarding Health & Safety they also ensure that their legal protection is updated. For
re-training Marks & Spencer invite business changes to the business, tax changes to
the business & products changes amongst many other things. Marks & Spencer invite
objectives/methods that need to be changed and new training, and also on going
development.
An example of legislation is the “Fair Packaging and Labelling Act (1996) – Provided
for the regulation of packaging and labelling of consumer goods. Requires that
manufacturers state what the package contains, who made it, and how much it
contains”.
Here is an example from Marks & Spencer’s website to show that they are adhere to
this legislation,
“Packaging helps to protect the product between being produced and used by the
customer. It prevents product wastage, carries important instructions and information
on ingredients and helps the product look its best in the store”.

Environmental Factors
With the current environmental climate as it stands, issues are being promoted daily
on the television, in magazines and newspapers and on the radio. All companies,
industries and organizations are being pressured to change their ways when it comes
to the materials they use and how they manufacture. Marks & Spencer have
established their own Green Policy which they call “Plan A” The chief executive of
Marks & Spencer states that it is called this because there is no “Plan B”. Marks &
Spencer has today announced a 100-point five-year plan to re-engineer itself to
become a carbon neutral, zero-waste-to-landfill, ethical-trading, sustainable-sourcing,
health-promoting business.