British retail bellwether Marks & Spencer (MKS) has built on much better-than-expected festive trading by announcing (16 January) a near half a billion-pound investment to open 20 new stores that the FTSE 250 firm insists is ‘core’ to its aim of becoming the UK’s leading omnichannel retailer.

Admittedly, Marks & Spencer had already announced plans to shutter a large number of shops back in October, so its retail park and high street presence will still reduce on a net basis, but the new investment demonstrates confidence in the retailer’s long-run prospects and feels significant considering the cost inflation and pressures on household budgets clouding the sector.

Marks & Spencer is to invest £480 million in 20 ‘bigger, better stores across the UK’ in a move generating over 3,400 new jobs and which aims to create a ‘fit for the future’ store estate.

Giving the retailer the confidence to go faster with relocations is the outperformance of recently relocated and renewed stores, where sales have been ahead of plan.

Marks & Spencer’s new store pipeline for the 2023-2024 financial year includes eight ‘full line destination stores’ in key city locations including Leeds, Liverpool, Birmingham and Manchester, as well as in Lakeside Thurrock.

Crucially, this major investment demonstrates physical retail continues to have a major role and that Marks & Spencer sees its multi-format stores, with a mix of clothing, homewares and food, as a competitive advantage.

The push to revamp the store estate also shows the retailer recognises the importance of having sites which are appealing for shoppers to visit and are in the right places to attract healthy footfall.

As chief executive Stuart Machin explained: ‘Stores are a core part of M&S’s omni-channel future and serve as a competitive advantage for how customers want to shop today.’ He added that Marks & Spencer is aiming to rotate from 247 stores today to 180 higher quality, higher productivity full line stores that sell its clothing, home and food offer while also opening over 100 bigger food sites.

Marks & Spencer’s Christmas trading statement (12 January) covering the 13 weeks to 31 January 2022 showed the retailer gaining market share in food, clothing and home.

Like-for-like food sales increased by 6.3% as Marks & Spencer not only outperformed the market but generated its largest ever Christmas sales. Clothing and home like-for-like sales grew by 8.6% in its third quarter as Marks & Spencer’s market share topped 10%, its highest level in seven years.

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