These are trying times in the City. The £1,000 lunches and lap-dancing frolics of yesteryear are but bitter-sweet memories. Old faces have disappeared, desks are empty, the acrid scent of redundancy hangs heavy over the atrium and all the air a solemn stillness holds. So, among those who still survive, we must forgive the occasional bilious attack. It is only to be expected.
One such attack came the other day from the research department of Credit Suisse. The targets of its spleen were Marks & Spencer and its chairman-cum-chief executive Sir Stuart Rose.
“We have studied M&S’s operating and financial performance over the tenure of the current management,” says the report. “We conclude that even before the current rapid deterioration of profitability, the company had made no financial progress outside of the £320m of largely supplier-funded cost savings initiated in 2004 and around £150m resulting from changes in accounting assumptions.”
Uncharacteristically, M&S chose not to comment. Normally, the response of the ebullient and sartorially impeccable Sir Stuart is to cite the 500 or so letters he receives every day – or is it every week? – from contented customers eager to heap praise upon his modest head. One wonders about these correspondents. I mean, what kind of person returns home from the shops, kicks off their shoes and sits down to write a fan letter to Sir Stuart Rose?To judge from the Credit Suisse report, they are tottering uncertainly on the foothills of senility. That would certainly explain the compulsion to scribble thank-you notes to millionaire shopkeepers, but it does not excuse the disdainful tone struck by Credit Suisse. M&S’s greatest mistake, it says, is its failure to address and reverse the company’s drift towards a much older customer base. “No business,” it adds, “can have a long-term future with this type of demographic profile.”
Now, it is forgivable to be bilious, it is forgivable to be old, but it is unforgivable to talk nonsense, which is what Credit Suisse is doing here. Fashions come and fashions go, but one which has endured ever since the 1960s is an obsession with youth. Despite all the evidence to the contrary, there is a persistent and tenacious belief that, to survive, a business must appeal to the young. At the heart of this fallacy is a mistaken notion about the nature of demographics. It assumes that the population is static, like a concrete road with the young at one end and the old at the other. In fact, it is more like a river, with constant movement. It may come as a surprise to retail analysts in the City, but the young are, even as we speak, in the process of growing old.
It may be true that M&S appeals mainly to more mature customers, people who, alas, are running out of years, but their ranks are daily being swelled by those who are departing middle-age, claiming their bus passes and going shopping. Not only does Britain have an ageing population, it is also a well attested fact that older people have a larger disposable income than the young.
Quite apart from hard economics, there are sound social, cultural and aesthetic reasons for resisting the compulsion to woo the youth market. The appeal and character of so many businesses has been changed for the worse by their pursuit of the teenage pound. The most notable example is the English pub. Once a place where all ages and social classes could mix, meet and converse in congenial surroundings, the pub today is almost the exclusive province of juveniles shouting to be heard above the din of music. Similarly, ITV, now on its uppers and possibly in terminal decline, is paying the price for courting the youngest, silliest and least educated. Newspapers, too, are persuaded that a failure to appeal to the young is fatal, hence their increasing resemblance to comics.
Sociologists, though not the brightest or best educated of people, had a point when they stressed the importance of rites of passage, among which was the process of gaining admission to adult things. It was through such a rite of passage that young people were admitted to the grown-up world of pubs. In other words, the young adapted to the institution, not the other way around, which explains why the pub survived unchanged for so long but is now transformed into a cross between a disco and a bear pit.
But the most damaging effect of the cult of youth is the infantalism it has fostered across all generations. Britons of all ages today are loath to grow up. So, M&S need not worry – its older patrons are toddlers at heart.