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Marks & Spencer Abandons Buy-British Policy in Favor of Cheaper Foreign Labor

Strategic Insights

— 1 min read

Marks & Spencer's decision to source more clothing from cheap labor countries has sparked concern for the British textile industry. The company's move away from its buy-British policy is part of a growing trend among UK retailers, who are seeking to maintain profit margins by outsourcing manufacturing to countries with lower labor costs. The impact on British manufacturers is dire, with some companies, like Dewhirst, announcing plans to relocate the majority of their production overseas to countries such as Morocco, Sri Lanka, and Indonesia.

Key Takeaways:

  • Marks & Spencer has reduced its reliance on British-made goods, with just two-thirds of its products now manufactured in the UK, down from 90% in the past.
  • The company's decision to source more clothing from cheap labor countries comes as other UK retailers, such as Laura Ashley and Jacques Vert, are also looking abroad to maintain profit margins.
  • British manufacturers, including Courtaulds Textiles, Dewhirst, and William Baird, will see a decrease in the share of M&S business from their British factories.
  • The decision has consequences for the British textile industry, with nearly 100,000 jobs lost in the last 10 years, reducing the number of people employed in the UK textile and clothing industries to 370,000.
  • Garments brought in from abroad cost significantly less than UK-made equivalents, including shipping costs.
  • Clothing imports to the UK are now running at over £6.75 billion a year, compared to £2.4 billion 10 years ago.

Statistics:

  • Marks & Spencer has 600 stores in 32 countries, including 290 in the UK.
  • The company has 40% of the UK lingerie market and one in every four men's suits sold here has the famous St Michael label.
  • M&S makes annual profits of over £1 billion, or £3.3 million per day.
  • UK textile and clothing industries have lost nearly 100,000 jobs in the last 10 years.
  • Clothing imports to the UK are now £6.75 billion per year, up from £2.4 billion 10 years ago.
  • Hong Kong is the biggest source of clothing imports, accounting for 16% of the total.

Sources:

  • British Apparel and Textile Confederation
  • Marks & Spencer
  • Laura Ashley
  • Jacques Vert
  • Courtaulds Textiles
  • Dewhirst
  • William Baird

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