Lunch and Learn: M&S chairman Archie Norman on the future of retail

Archie Norman is one of Britain's leading businessmen. He has led transformations of major British businesses and served on the Boards of several others. He was also an MP for eight years and worked at the highest level in British politics. In 2017 Archie was appointed chairman of Marks and Spencer.

Archie joined an exclusive webinar with Enterprise Nation founder Emma Jones to answer questions on how he feels retail might emerge from the coronavirus crisis and offer advice for founders on how to emerge from this phase with a stronger business.

We've summarised his main tips below and the full recording is above.

The impact of COVID-19 on retail

Archie believes the impact of the pandemic on UK retail will be felt for many months to come. "We shouldn't think in terms of three months or one month - it's about getting through the next 18 months to two years."

"Everything we saw happening before is going to be accelerated," he added. "Just as some retailers were struggling, they've now failed faster and just as some high streets were changing, they're now going to change faster. Online is also growing faster. M&S is now a pure play online business. We have to think like a pure play."

Perception of brands after coronavirus

There have been many examples of positive and negative ways in which big companies have dealt with the impact of coronavirus in terms of how they've treated customers and employees.

Asked if he believes consumers will remember those actions when deciding which companies to do business with in the future, he said: "In retail, there has generally been community and profit sacrificing spirit. Will people remember that? I think people will remember if they see it's core to what the business is, if it's what the company is like in 1-2 years time.

"Brand isn't what you do with TV advertising; it's in the culture. When I was at Asda I thought I could go in blindfolded and tell how the store was performing, hear how employees are behaving. If that culture is there and if what you're doing for the community is genuinely part of that, you'll have something special."

Reopening stores safely

Many retailers are preparing to reopen as lockdown measures are eased based on safety guidance issued by the government.

On his experiences of safety in store, Archie said: "My one observation is we've been running food shops throughout the crisis with 50,000 people. As far as we can tell we've had no higher infection than the national average, the evidence is that it has been safe to work.

"You should keep reminding your people of the core medical advice and observe it properly. It has been quite clear shopping has been manageable."

Regenerating High Streets

Archie admitted that Marks and Spencer is planning to close stores and when that happens "it all tips into each other and it's no longer a destination. It's a tragedy."

He said problems for UK High Streets include "business rates going up and up, rents the same, councils not accepting it's happening".

To solve the issues he said "local authorities should generate a really strong regeneration scheme - repurposing high streets as residential, catering, leisure. You can't do it bit by bit, you need a big scheme. I'd like to see a contested process where people bid for funds based on the best scheme, government backs them and gives planning leeway and areas get business rate free period to encourage businesses back in."

Saving failing businesses

Archie is well known as a business turnaround expert but what's it like to have that role?

"Turnaround is the polite word, what you mean is a failing business. I've never been offered a job in a thriving business, they tend to be turnarounds. To take on very difficult situations, it's not a happy clappy event, most turnarounds don't turnaround.

"You've got to be thick skinned and prepared to go through the fire. You've got to be unbelievably tough at times, relentless with people who don't want to change. People often just read a good book on leadership and do nice things but forget the floor boards are tumbling below their feet.

"I really hope in two or three years when M&S has gone through transformation my role will change completely and I can put my feet up on the boardroom table."

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