The Italian retail trade experienced a growth rate of 1.2 percent in 2003, led largely by recent developments in distribution which sprang from changes to long-standing import barriers in the country (alibaba.com, 2008). Easing of legislative restrictions have made the Italian marketplace more favourable for retailers of all varieties in relation to ease of setting up new business ventures in this country. Lower costs plus the development of a new distribution infrastructure in this country make it appealing to international companies looking for new market opportunities.
M&S products are considered fast-moving products and, in Italy, these types of goods are purchased by a younger market audience (Eghbal, 2007). Marks & Spencer has often been criticised for not appealing to younger demographics, instead relying on far-too-traditional marketing which has driven the business’ operating model for over 80 years. M&S must be aware that younger demographic purchases will make up the majority of fashion and houseware purchases in this marketplace.
The Italian economy is currently experiencing the worst recession in the last sixty years, with household consumption rates falling by 1.1 percent in early 2009 (OADBS, 2009). However, despite this recessionary environment, consumer disposable income levels grew by 4.3 percent since 2008, indicating that there is strength in consumer incomes and availability of resources needed to purchase M&S products (OADBS). In comparison to other European countries, declines in spending in Italy are not as substantial while other countries experience more difficulty in a recessionary environment.
“There is an imbalance between the north and the south of the country” in terms of retail infrastructure, with more competitors and the existence of distribution infrastructures in the north region of Italy (alibaba.com, p.1). Because of this infrastructure, the northern regions of Italy