Marks & Spencer Blames Brexit as It Closes French Stores
Getting fresh food through Brexit’s “supply chain complexities” has prompted the closing of 11 stores, the company said.
The British retailer Marks & Spencer blames Brexit as it closes French stores.
A Marks & Spencer store in Paris. The British company said “supply chain complexities” after Brexit made getting fresh food from Britain to France each day too difficult.Credit…Ian Langsdon/EPA, via Shutterstock
By Eshe Nelson
Sept. 16, 2021, 10:03 a.m. ET
Marks & Spencer, the large British retailer that has been battling Brexit costs and delays for months, said on Thursday that it would close its 11 food stores in France.
The stores were supplied with products made in Northampton, near the middle of England, and shipped across the English Channel each day. At the start of the year, once Britain began its new trading relationship with the European Union, the stores’ shelves emptied out in Paris as new customs checks and tariffs upended the retailer’s supply chain.
“The supply chain complexities in place following the U.K.’s exit from the European Union, now make it near impossible for us to serve fresh and chilled products to customers to the high standards they expect,” Paul Friston, the company’s managing director for international business, said in a statement on Thursday.
Rather than booming free trade with the European Union and countries farther afield, the post-Brexit trading rules have frustrated many companies with significant added costs. Rules of origin requirement have forced clothing retailers to move distribution centers to the European Union, businesses of all sizes have increased customs payments and food producers have to pay for health certificates. Supply chains have also been badly disrupted by the pandemic. Recently, the British government decided to delay the imposition of checks on goods imported from the European Union until mid-2022.
M&S reported more than GBP16 million ($22 million) in costs for the financial year ending in March, which included a digital track-and-trace platform and veterinary certification costs. It said the biggest Brexit impact was on supplying its stores on the island of Ireland.
The stores in France that are closing by the end of the year are run by a partner in a franchise agreement. Nine other stores in France, located in transport hubs and operated by a different partner, will stay open, the company said. The website, which sells mostly clothes and home products, will keep running.
M&S had already changed the supply of products in the Czech Republic because of Brexit. It stopped selling fresh and chilled food and increased the range of frozen products and those that could be stored at room temperature.
Brexit has been blamed for the closures, but the international business of M&S, which includes stores in India, the Middle East and Asia, has been hampered by the pandemic as well. Revenue dropped about 17 percent in the year to March.
The company was struggling with shifting consumer trends well before the pandemic and was trying to restructure its business away from clothing and home products to food sales, while closing stores and improving its online shopping experience. The pandemic forced an acceleration of this plan. Last year the company substantially increased the number of jobs it planned to cut to 7,000, from 950. In the end, more than 8,000 workers left its stores in Britain by March.