Not just recession, but M&S recession, joked
The Economist in its 5 July issue. The nation's
talismanic food and clothing retailer had posted falling revenue
that week and its CEO, Stuart Rose, had warned of choppy waters to
come.
And yet, in the realm of IT, Marks & Spencer has announced a
significant investment in the future. While
acknowledging that the UK market will remain weak for the next two
years, the company is betting on quickening international and
online sales. International sales were up more than 16% last year,
and M&S Direct, the online business hosted by
Amazon, is growing at 70% a year.
And so the retailer is spending in the region of £450m on new IT
over a three-year period. The company plans to develop a "modern
and streamlined logistics network with new overseas warehouses, as
well as offshore stockholding and consolidation facilities". These
are to replace warehousing and distribution centres that have
changed little since the 1970s.
An element of the strategy is to put in place a commercial
strategy for (guess where?) China.
IT investment seems to be bearing up well during this year of
credit crunch and incipient - at this stage still potential -
recession. The achievement of the Faster Payments
system, which processed more than four million transactions in
June, is one index of this.
Another is the evidence from the Survey of
Appointments Data and Trends for the first quarter of 2008. It
registers some evidence of retrenchment in the IT jobs market, but
reveals it to be healthier than it was in the first quarter of
2007. Advertisements for permanent jobs were up 30%, and
contractor positions up 14%. The survey for Q2, the results of
which will be with Computer Weekly soon, may start to cloud that
picture.
In the meantime, we can take succour from the forward-looking
technology story in our Radar section, which reports that, thanks
to the innovations in graphics chips driven by video games such as
Grand Theft Auto, there might soon be a
supercomputer in every home.