Malcolm Pinkerton, senior analyst at Verdict Research says: “It’s a real coup for M&S and it’s not going to damage Morrisons. It is a blow but they still have a strong management team and the effective strategy put in place by Marc Bolland will continue.”
Ed Garner, director of research at TNS World Panel agrees that while his exit is not damaging to Morrisons in the short to medium term, in the long term “there is a gap to be filled”.
Bolland’s appointment is somewhat of a surprise, in part because of his relative lack of experience in the non-food and fashion sectors.
M&S has perceived problems with its food business as its positioning means it’s not somewhere consumers can do a full grocery shop. Garner says that Bolland’s experience in the grocery sector makes him well placed to address the problems facing M&S’s food business.
“He saw what Morrisons’ problems were and succeeded in turning it around and relaunching it based around a communications strategy and new advertising that centred on a fresh food message, allied with strong promotions,” he says.
Garner adds that the biggest battle will be fought with Waitrose and to succeed “Bolland needs to outwit Mark Price.”
Pinkerton agrees, saying: “His experience is in brands and FMCG products, but he is perfectly capable of adapting to non-food”.
Sir Stuart Rose has dismissed the idea that Bolland’s lack of experience in fashion and non-food is an issue, highlighting M&S’s strong management teams including general merchandise director Kate Bostock and food director John Dixon.
Sir Stuart instead stressed Bolland’s international credentials from his roles at Heineken NV in the Netherlands, saying: “Bolland is an international man and that is the way M&S wants to go”.
Shortly after the announcement of Marc Bolland’s appointment, shares in M&S rose 5% while Morrisons shares dropped by 5%.
The immediate dip in Morrisons shares following the announcement illustrates an assumption that Bolland was fully embedded in Morrisons, says Garner.
Speculation over who would fill Sir Stuart’s position has been rife since he said
he would step down. Almost every big name in the grocery sector, including Sainsbury’s Justin King and Asda’s Andy Bond, was at some point hailed as the person to succeed Sir Stuart as well as a number of strong internal candidates including Bostock, Dixon and financial director Ian Dyson.
Sir Stuart’s dual role as CEO and chairman of M&S has been a subject of contention since he took over from former chairman Terry Burns in June 2008. He is expected to step down as chairman by July 2011 and says he will “depart gracefully” when the time is right.
Morrisons has said that Bolland will depart at the end of the retailer’s financial year in February, but the details of when he will officially join M&S are not yet clear.
Pinkerton says that the real question now is who will replace Bolland at Morrisons but is confidant that when he is replaced, it will be with an equally strong candidate.
The chain posted the highest growth of the top four supermarkets (8.5%) in the past three months according to the latest TNS Worldpanel and is due to post third quarter results tomorrow (19 November)