Multichannel growth as M&S, Vodafone and Dunelm invest in stores and digital

Britain’s multichannel retailers are in upbeat mood this week, with announcements from M&S and Vodafone of investment both online and on the high street.

Marks & Spencer this week said it would extend its bricks and clicks approach to international growth, building flagship stores in key cities and supporting them by online selling. It plans to focus on growing within existing and priority markets of India, China, Russia, the Middle East and Western Europe. Over the next three years it aims to build 250 new stores as it looks to grow international turnover by 25% and profits by 40%.

Marc Bolland, M&S’s chief executive, said: “Our strategy of becoming an international, multichannel retailer is more relevant than ever before because of the strong growth potential of international markets. We are focusing on flagship stores to deliver brand presence and stand-out.”

Then, today Vodafone unveiled its vote of confidence in the UK’s high streets, with plans to open 150 new stores in the UK as part of £1bn investment this year that will also include networks and digital services. It says the capital investment programme is the “largest in its history” and designed to support its commitment of extending mobile services to 98% of the UK population by 2015, using 2G, 3G and 4G services.

Vodafone UK chief executive Jeroen Hoencamp said: “This year we’ll invest more than ever before to provide our customers with the strongest network and best services in the UK. We’re also committed to putting our brand and our people where our customers want us: right at the heart of their high street and shopping centre. Our £100 million retail investment this year will increase our ability to serve our customers better with highly skilled personal advice and support in 150 brand-new locations.”

Prime Minister David Cameron said: “This is a fantastic vote of confidence in the UK workforce from a company investing for the future to harness the next generation of digital services.”

Meanwhile Dunelm today said investment in multichannel had helped to drive sales, as it reported sales up by 9.9%.

The company said sales had risen to £195.4m in the 13 weeks to March 29, up by 9.9% on last year, in total, and by 5%, on a like-for-like basis.

That was down, said the homewares multichannel retailer, to four store openings and investment in areas including multichannel. Those investments have included the expansion of its Dunelm at Home service.

“We have seen continued progress in our multi-channel business with pleasing revenue growth during the period as we have capitalised on our improved delivery proposition since opening a new fulfilment operation last autumn, as well as the expansion of our range of exclusive home-delivery products,” said the statement. “Our next key development will be to transition our website to a new software platform; we expect to complete this project in summer 2014 as previously indicated.”

Chief executive Nick Wharton added: “With clear opportunities to develop further our in-store offer, to expand our store portfolio and to benefit from our exciting multi-channel and customer service initiatives, the board remains confident in the growth prospects for the business.”

Our view: Britain’s retailers are showing real signs of optimism this week as they invest in expansion. The focus for M&S is on international growth, while Vodafone is taking an interesting stake in the UK’s high streets. It’s not so long since those same high streets were being written off. But the lesson of multichannel retailing has been that both clicks and bricks matter, something that both M&S, with its emphasis on the use of high street stores to “deliver brand presence” and Vodafone clearly get.