M&S is set to launch a new credit card and the retailer’s existing store card base means that it will enjoy a strong position on entering the market. Yet at a time when more issuers are being forced to exit rather than enter the market, M&S will need to maintain a strong position to survive long-term.

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UK retailer Marks & Spencer is poised to launch a new credit card. The move, likely to take place later this year, follows an apparently successful pilot scheme conducted at nine stores in South Wales. It is thought that the card will also incorporate a loyalty scheme.


Few details are forthcoming from M&S on exactly how successful the trials have been; yet industry opinion is that the retailer has the potential to be a strong contender in the competitive UK credit card market.


One of M&S’s greatest advantages is that it already has a store card customer base of around 3.5 million active accounts. If M&S succeeds in transferring these active account holders across to the credit card, then it can expect to be a credible seventh in the market.


In spite of this notable strong point, entering the credit card market in the current environment is a brave move. The UK credit card market is currently undergoing a period of consolidation and while there are many examples of issuers exiting the market in recent times, there are few players entering it.

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In the last year alone, Alliance & Leicester sold and outsourced its card portfolio to MBNA, Barclaycard bought the UK arm of Providian and Lloyds TSB acquired Accucard. And there is more still to come. If HSBC’s purchase of Household International is completed, HFC will no longer be an issuer in its own right. Furthermore, Northern Rock is also known to be considering exiting the market.


Ultimately, the UK credit card market is heading in a direction where only a few key competitors will remain and the common denominator among these players will be scale. Many smaller issuers are now asking themselves whether they can seriously compete in such a marketplace. M&S may be in a strong position on entering the market, but it will need to maintain that position in the long term if it is to survive.


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