We should not worry that M&S's profit warning is an indicator that the high street is going into recession. Other retailers are still doing well. Indeed, we should celebrate the fact that the market is working efficiently to punish arrogance. Sainsbury's suffered similarly a few years ago, and is now beginning to turn its business round. It is a good thing that consumers have become more fickle, because unthinking brand loyalty is what allows management to become complacent. Managements that take their position for granted, or indulge in boardroom squabbles, will find that a dowdy player such as Tesco has overtaken them. The fact that Marks & Spencer is a mighty name, a huge force, is nothing to take comfort in. So, once upon a time, was Woolworths.
The signs are that the diminishing power of the brands will lead to more volatility for companies, but the humbling of M&S is good news for the consumer.Reuse content