Straight From Stuart February: A busy start to 2023 and supporting National Apprenticeship Week

Hello and welcome to the latest edition of Straight from Stuart. Today is day 261 since I became Chief Executive, and every day I’m learning more about the role and our business.

January disappeared in a flash, but it was a very busy month for us. It started off with our Christmas results, and I was really pleased that we delivered another strong performance - testament to the hard work of all our colleagues over Christmas. Both businesses outperformed the market on volume and value, and this outperformance was driven by focusing on what we do best; delivering exceptional product at value you can trust. There’s still a long way to go but we are making progress on our plans to reshape M&S, which gives me great confidence in the future of our business.

Of course, value is still very much front of mind for our customers, and we’ve been working especially hard to deliver trusted value across Food and Clothing and Home.

In Food we’ve bolstered our Remarksable Value range and locked the prices of over 100 products until Easter, while in Clothing & Home we’ve launched our Value You Can Trust campaign to shine a light on not just our competitive prices, but the fantastic quality too.

After all, value = price + quality; and that’s what in M&S we call the trusted value equation. I took the opportunity in January to write to our customers to explain what this really means, as well as thanking them for shopping with us. I really am grateful to every single customer that supports us.

“Trusted value is in our DNA, and as the custodian of the business, I promise that it always will be.”

Investing in our stores

In January we announced a ￡480m investment in our store rotation programme - making sure we have the right store, in the right place, with the right space - which of course is a key part of our strategy for growth. We’ve already secured a pipeline of 20 new sites for the 23/24 financial year and over the next three years the programme will create over 3,400 new jobs - making a difference to communities up and down the UK.

“Customers want great shops and our communities need them. Our job is to create stores that are sustainable in every way; inspiring today’s customers and withstanding the test of time.”

Also this month:

• Jeremy Townsend joined as our new Interim CFO: Jeremy has a big task ahead of him to ensure we make the right choices in order to deliver growth.
• Met some of our key analysts and shareholders: both on a 1-1 basis and via an Exane webinar with over 60 investors.
• Attended colleague listening groups: as I do every month to see what’s on colleagues’ minds. It was great this month to meet with our new Personalised Discovery team following our acquisition of specialist personalisation business Thread.

National Apprenticeship Week

This week is #NationalApprenticeshipWeek and I’ve enjoyed reading all the stories of M&S apprentices we’ve shared on LinkedIn throughout the week. M&S has a long history of supporting apprentices and we currently have 270 apprentices across the business – from Engineering to Data Science to Buying & Merchandising.

Apprenticeships are just one way that we help young people get into work and progress. Through our market-leading Marks & Start programme with The King's Trust , unemployed young people who often face barriers to work join us on valuable work placements which allow them to build their experience and social skills. Since 2013 we’ve supported more than 10,000 young people across the UK into work via this route and 81% of the young people who complete the programme are offered further work at M&S. It really is life changing and our colleagues - who put so much into training the participants that we are more than happy to support - get a huge amount out of it too.

While this is important work, we could do so much more to help develop our young people. But every month we have to pay a tax to the government called the Apprenticeship Levy. This tax goes straight into Treasury coffers and is unhypothecated – meaning the Government just takes it and spends it on what it likes. In theory we should be able to claim the money back for each apprentice we take on, but overly restrictive, bureaucratic rules mean it’s really difficult to access the funds.

The levy costs us ￡5.4m per year and we’re currently losing around ￡365k every single month in unspent funds that could be spent on anything the Treasury fancies. Since April 2021 we have lost almost ￡8m in total – which is frankly ludicrous. Just think what training we could have provided to colleagues across the UK with it.

Earlier this week Helen Dickinson wrote a letter to the Government on behalf of retailers calling for reform to the Apprenticeship Levy.

Helen wrote: “Retailers want to invest more in training a higher skilled, more productive and better-paid workforce. They want to create more opportunities for people up and down the country. They want to contribute more to growth. But the broken apprenticeship system is a ball and chain around their efforts.”

I wholeheartedly agree.

Put simply, the Levy is a tax on opportunity and on growth, and is in desperate need of reform.

We would love to be able to use the levy to provide more Marks & Start placements, and to expand the number of apprenticeships we offer to our colleagues, but the levy rules stop us from this. Our ask of Government is simple: Expand the scope of the Apprenticeship Levy into a broader skills fund, allowing businesses like ours to bring more people into work, build skills and careers, and help level-up the UK.?

Have a great rest of February. I’ll see you back here in March for the next edition.

Stuart