Sales figures released by Marks & Spencer last Wednesday have prompted some to rethink its high street strategy. Clothing sales for the retailer were down 2.5 per cent in the first three months of 2004, with home sales declining by 13.7 per cent. Speculation also has it that some 1,000 jobs are being cut at Marks' headquarters as it struggles to match its cost base to its spiralling earnings.

Retail analyst Richard Ratner at Seymour Pierce in London recently told a Scottish daily that M&S could learn from Swedish retailer Henner & Mauritz. Ratner stated: "Marks & Spencer's first problem is their pricing architecture, they have too much expensive stuff. You can sometimes get away with that, providing it's the right product, but you still need a competitive price point to tease people in. H&M are very good at that. M&S is not."

H&M is much more flexible in buying from its suppliers, he says - the company will do more to get better prices. M&S is targeting a 1 per cent per annum cost reduction for the next three years. But it is still not buying as competitively as H&M.

H&M's customer, as Ratner states, is younger and more trend focussed than at M&S. The British retailer will always sell to middle-age, middle-Britain. What M&S hasn't quite realised is that the market is trending downwards age wise. "The 80-year olds want to look like they're 60, the 60-year-olds like they're 40, and the forty-somethings like they're 25. "