The food and clothing chain added 7,000 jobs cuts to nearly 1,000 last month, equating to around one in ten of its total headcount, and around 12% of the cuts are thought to be facing its 60,000-strong shop-floor workers over the next three months.
This round of job losses takes the number of announced retail sector redundancies to around 24,000 for the past month and a half.
In July and August the retail sector’s cuts include:
- earlier this week John Lewis said it will not reopen eight stores, putting 1,300 jobs at risk
- some 2,500 redundancies were announced last week by department store chain Debenhams, on top of 4,000 cuts it has made since May
- earlier this month WH Smith (LON:SMWH) said it was planning to axe up to 1,500 jobs, while River Island and M&Co both announced a comparatively generous rounds of 350 and 380 cuts, respectively
- that same week, Dixons Carphone (LON:DC.) said it was getting rid of 800 store roles, four months after shutting its Carphone Warehouse stores with 2,900 resulting redundancies, and DW Sports said 1,700 jobs were at risk though some may be saved if Mike Ashley's Frasers snaps up the business
- a month ago, Tesco (LON:TSCO) got rid of contract cleaners in nearly 2,000 stores
- in July chemist chain Boots, part of Anglo-US group Walgreens Boots Alliance Inc (NASDAQ:WBA), said 4,000 jobs will go
- at the start of last month, airport and train station retail specialist SSP (LON:SSP) revealed plans to slash staff numbers by up to 5,000
- in mid July DFS Furniture (LON:DFS) said it was getting rid of 200 jobs, while Shoe Zone (LON:SHOE) culled 20 stores and said some head office jobs were going too
- extending into car retail, both Pendragon PLC (LON:PDG) and Inchcape PLC (LON:INCH) last month unveiled restructuring plans that suggested they were cutting more than 2,000 jobs between them
Before the cuts announced by M&S and Debenhams, total job losses announced by the retail sector were already topping 114,000 so far this year, according to data from the Centre for Retail Research (CRR) that goes up until mid-August.
Of this, 42,817 jobs have been lost to companies going into administration and 61,543 from restructuring, rationalisation, streamlining, rightsizing, or whatever new terms for job losses is being employed.
Some 13,664 stores have been closed, the CRR said, adding that “we do not yet know how many of these will actually re-open at all, in view of the fact many shoppers seem to be avoiding the high street at present”.
Back in March, the centre had forecast that 20,622 stores will close in 2020 versus 16,073 in 2019 and job losses will rise to 235,704 against 143,128 last year.
Some stores may reopen after pubs, cafes and restaurants re-open.
“It could take much longer before we know how many shops remain in business. Judging the impact of coronavirus finally on retailing may take a little more time, because it is not primarily about corporate announcements,” the research group said.
The coming of the coronavirus pandemic has accelerated and exacerbated previous trends, analysts and sector watchers say.
For M&S, most of the cuts are being aimed at its 60,000 shop floor workers, plus some in its support centre, regional management and head office too.
For the food and clothing chain this represents a huge step from the 950 job cuts that it thought would be enough only a month ago.
Management said there had been a material shift in trading since May when stores reopened after the coronavirus lockdown, plus a realisation “that we can work more flexibly and productively with more colleagues multi-tasking” and working across both the food and general retail sections, the retailer said.
“M&S has realised it needs to act now if it wants to secure the longevity of the business,” said analysts at Hargreaves Lansdown.
“Coronavirus has exacerbated existing fault lines – namely that shopping habits have changed and M&S has been slow off the mark meeting those shifting demand patterns.”
Debenhams put it even more simply: trading is “a long way from returning to normal” and the embattled group said it needed to align store costs with more “realistic expectations” for how things will continue.
Like M&S, Dixons Carphone boss Mark Allsop framed his restructuring plans as being designed for a long-term shift to “create a flatter management structure and make it easy for our customers to shop with us”.
Some staff are being shifted to its virtual ShopLive shopping service, where customers can get advice over a video link from their home computer or smartphone.
With the furlough scheme running until October, there could be more rounds of redundancies in the autumn.
Other retailers that have not unveiled big job cuts, or not yet anyway, include JD Sports (LON:JD.), though it seems inevitable that some will go after it put its Go Outdoors arm into administration and them bought it back; Card Factory (LON:CARD), which having furloughed 90% of staff has since opened more than 1,000 of its stores; Mothercare (LON:MTC), which had already restructured before the pandemic hit; similar for N Brown (LON:BWNG), which has been moving toward a digital-first strategy but announced 120 job cuts in March; while TheWorks.co.uk PLC (LON:WRKS) was planning to open all of its stores with no mention of cuts.