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The Observer: Why our love for M&S will make other stores green

Simon Caulkin
Sunday January 21, 2007

Marks & Spencers return from the corporate valley of the shadow of death – even ultra-cautious chief executive Stuart Rose has said the ‘r’ word, conceding that the company has moved from the emergency to the recovery ward – is cheering and instructive in several ways.

First, the story was, and is, a sharp reminder of how few companies there are that people actually like. M&S, the BBC, perhaps Boots and John Lewis – they can be counted on one hand.

Which is why, as a colleague remarked, when M&S fell from grace in the 1990s, it was – like the weather and the England football team – something to talk about in the pub; a grumble, yes, but that’s very different from the sheer delight at the downfall of Ratner, and the schadenfreude that greeted the discomfiture of Shell or the toppling of BP or HSBC. Even the travails of Morrisons or Sainsbury’s were met with indifference. But we didn’t want M&S to be taken over by Philip Green: what would become of the nation’s socks and knickers?

In the end it was a close thing. Just in time, M&S worked out just why it was that we liked it (something Boots is still trying to do), stopped trying to be a go-go dancer and returned to its value(s) proposition. With relief, people started buying its food and clothes again.

In this context, its £200m ‘Plan A’ (because there is no ‘Plan B’) to go carbon neutral, extend sustainable and ethical sourcing, and help people live healthier lifestyles, announced last week, is another shrewd and well-timed step back to the future. It could even be a masterstroke.

The economics of local and ethical sourcing are less straightforward than they might seem – for many food categories a surprisingly large proportion of a product’s vehicle miles are accounted for by shoppers driving to the local store. Even so, the move back to UK sourcing, at least of food, and the emphasis on free-range and fair trade undoubtedly respond to people’s desire to vote with their purses. Not only is the national supply of reasonable Y-fronts safe – from now on our underwear could be fairly traded.

It is a similar story with the setting- up of a Supplier Exchange to share best practice and innovation among suppliers and ‘help… them secure funds for investment’.

Close support of its UK suppliers was, of course, one of the practices that helped M&S win so many UK ‘most admired company’ awards in the 1980s and 1990s that the prize in that particular form was abolished.

How do we know that this isn’t greenwash and the company means what it says? Ultimately, we don’t; we have to trust it. But M&S knows that, and it is also well aware that as an exclusively own-label company, it can’t hide behind manufacturers’ labels. It needs this stuff to be part of its DNA – and if it’s not part of its DNA, its customers are liable to get very cross indeed.

For, as many companies have become aware, pinning your ethical colours to the flagpole isn’t an easy option. It subjects you to a level of scrutiny that those who keep their heads down may avoid, and raises expectations that can turn against you if you let people down.

In the same way, being held in affection as a ‘national treasure’ also works both ways. Affection can support you through a bad patch (provided it doesn’t last too long: many people would dearly have liked Rover to create a car that they wanted to buy), but affection unrequited or scorned can create a terrible backlash.

However – another cheering thing – ‘Plan A’ can also be viewed as an acute competitive move. For once, this is not a race to the bottom, but the reverse. M&S’s eco-plan, followed later in the week by Tesco, raises the bar not only for the rest of the retail industry, but also for the corporate great and good who will make up the CBI’s climate-change task force, also announced last week.

Faced with the retail example, they will hardly be able shrug off the challenge. It raises the risk for those who choose not to move in the direction of sustainability, and more generally is a significant blow to the fundamentalist view that the only job of business is to create value for shareholders.

The final reason for pleasure is that, as in other fields, cheating the grave is a hard thing to do. Particularly in these unforgiving times, few companies get, or take, a second bite at success. Many firms succumb to ‘strategic drift’, where strategies are judged according to how well they fit with what worked in the past, rather than with changing market conditions.

Others, like M&S, seem to forget the roots of their competitiveness – in customer and supplier relationships – as they lurch off in pursuit of the gods of shareholder return.

Now that it is back on track, M&S still has to make sure that it marries its enduring values with the new environment, and ‘Plan A’ is part of that attempt. Welcome back.

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