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The Markets
by Proactive
Proactive UK has moved.
Coverage of London’s small caps continues on proactiveinvestors.com
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK

Retail

Marks & Spencer awards store staff 15% bonus for work during coronavirus epidemic

Any of the retailer's staff who are furloughed will still get full pay

Marks & Spencer Group PLC (LON:MKS) said it is paying store and supply chain staff 15% extra pay in recognition for their work during coronavirus outbreak.

Also, staff at the food and clothing retailer who are furloughed will still get full pay, with the company offering furloughing on a voluntary basis for those with caring commitments, who are feeling more vulnerable or who need to self-isolate for seven to 14 days.

In recent weeks the FTSE 250 group has moved over all of the staff from its Clothing & Home teams to help out on the food business, with the non-food operations temporarily suspended and outlet stores closed.

While there has been plenty of focus in the news about the traditional big four grocers, industry data from Kantar this week showed M&S Food saw a 23% spike on a four-week basis, the second-best performance in the market.

Moreover, the Ocado Retail joint venture between M&S and Ocado Group acquired 133,000 new shoppers over the past 12 weeks, helping it boost sales over the same period by 12.5%.

However, because of the government's coronavirus lockdown, sales at M&S's clothing division are likely to tumble, with analysts Goldman Sachs forecasting a decline of 60% in the three months to the end of June, compared to last year.

Shares in M&S were down very slightly at 99.08p on Wednesday morning, 54% lower since the start of the year.

Will the rest of the supermarket industry follow?

M&S has followed Tesco in offering extra pay to store staff, 10 days after the supermarket giant's offer and the move is likely to heap pressure on other supermarket groups to follow, especially if the industry receives a 12-month business rates holiday, as has been indicated by the government.

Clive Black, head of research at Shore Capital, told Proactive: "Supermarkets are incurring considerable cost growth and very volatile trading patterns.

"That said their front-line staff have been a little short of heroic and it could be envisaged, for example, that business rate relief could be utilised to offer some expression of thanks to their teams."

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