M&S should pay Living Wage and change negative narrative surrounding the business

The retailer has reported falling sales again

Another grey day for M&S as retailer disappoints again (Getty)

If M&S bosses had their brains in gear they would realise that it might be quite a good idea to listen to the shareholders who are calling for the company to pay the living wage and become an accredited Living Wage Employer.

Yes, it’s not just the protestors outside the AGM beating that drum. A group of investors with £100bn assets under management also think it would be a good idea.

Co-ordinated by Share Action, they don’t just argue for the move because it’s the right thing to do (although it is). They say it would be of benefit to their investment portfolios.

I should say at this point that the living wage is not the same as the Government’s National Living Wage, which is the re-branded minimum wage. It is set by the Living Wage Foundation, which calculates the rate based on how much it costs to maintain a decent basic standard of living.

The reason that Share Action’s group wants M&S to join the more than 3,000 employers that have sought, and achieved, accreditation is simple: They stand to benefit as much as M&S staff.

Living wage employers experience lower rates of absenteeism and staff turnover (handy in a tight labour market). The quality of the work they receive also tends to improve. There is a solid economic and business case for paying it.

M&S is the sort of company that could use something resembling a solid business and economic case. Put simply, it’s struggling. The latest set of figures show that.

The 1.2 per cent fall in like-for-like clothing and home sales (the number excludes new store openings or closures) for the first three months of this year has been touted as better than expected. The pace of decline is slowing, and M&S is doing better with more profitable full price sales than it was.

It doesn’t change the fact that if you have to celebrate a 1.2 per cent decline you’ve got problems.

The glass half empty case takes into account that last year’s comparative figures were themselves pretty awful. Easter fell late this year too, boosting M&S’s figures by an estimated 0.6 per cent. And then there was the weather. It was great for clothing sales, as the numbers put out by Sainsbury’s and Primark demonstrate.

So, M&S’s numbers were actually pretty grotty.

That won’t surprise too many people. M&S has been this way for ages. To address the problem the company has done what companies usually do. It has paid a revolving door of middle aged blokes in fancy suits a stupendous amount of cash in the hope that one of them will stop the rot. They have all failed.

That latest incumbent – Steve Rowe – has all but given up on M&S as a clothes retailer in favour of prioritising food. Which was also a disappointment (sales were down 0.1 per cent). Again, worth noting that M&S’s rivals have been doing much better (see Sainsbury’s again, but it was hardly alone).

So here’s an idea for M&S: Do something different. Instead of wasting money on over paid executives, spend some of it on your staff. Display the living wage accreditation mark prominently. Not only will you get better work from your people, customers might start to feel good about shopping at M&S again. They might even be willing to pay a bit more to do so.

The company did something stupid a while back, ramming through a new contract that hurt some of its longest serving and most loyal staff. But that doesn’t mean that the narrative can’t be changed. And change is what M&S needs.