More bad business reporting

Do BBC journalists have the foggiest idea about business? Jim Naughtie’s interview with M&S boss Sir Stuart Rose makes me ask. Naughtie seems to presume that M&S’s fall in sales is a sign of recession. But he misses another story entirely.
M&S say its like-for-like sales fell 5.3% in the year to the quarter ending June 28. But we know this is significantly weaker than sales generally; the BRC says like-for- like sales fell just 0.5% year-on-year in the three months ending May - leave aside the stronger official figures.  M&S, then, is losing market share, a fact Sir Stuart, to his credit, admitted to.  
This raises lots of questions Naughtie never bothered answering. For example. What, if anything, is M&S doing wrong? Has the company over-expanded: its total sales fell just 0.5%, suggesting the problem is that sales are spread over more outlets, rather than that demand is slumping? Could it be that the strategy that served M&S well for the last five years has outlived its usefulness? If so why? Or could it just be that M&S has been a bit unlucky and its bosses are less in control of its fate than they pretend?
But Naughtie asked none of this, and let Sir Stuart get away unchallenged with the claim that “we are a strong business in a weak market.” It was a free advert if not for M&S then at least for Sir Stuart.
Now, this could be yet another example of Naughtie’s anti-journalism - his oleaginous sucking up to anyone in authority. Certainly Robert Peston would have done a less terrible job. But I fear it betrays at least three errors journalists - not just at the BBC - sometimes make:
1. They take business statements at face value, rarely questioning vested interests. Any businessman claims his failures are due to economic conditions and his successes to personal skill. This is not challenged sufficiently.
2. They don’t take their cues from the market. M&S’s share price fell 19% this morning, even though the market generally is up. So the market is telling us there’s a company-specific problem here. This should have given Naughtie a clue.
3. They fail to see that the macroeconomy is more stable than any business. Many businesses thrive in recession and fail in booms. You can never infer anything about the macroeconomy from specific company performance.  

Comments

[Tom Freeman]

I'd add another thing these interviews get wrong: they're carried out by generalists like Naughtie, Humphrys and Paxman, who may well be intelligent and have good general knowledge of current affairs, but they're not experts in the field of retail/monetary policy/healthcare organisation/local government/etc.

The role of the interviewer seems to be to bring 'oomph' and make the interview sound dynamic. Letting specialist reporters do these interviews would mean the interviewees would have their feet held to the fire more thoroughly - if perhaps less theatrically.

[Paulie]

Yes - and they wouldn't have even invited M&S on if their numbers had been more positive.

Rose was on to cheers along the narrative that we are heading towards a recession. They'd already decided what they were going to say - they just needed some background.

[Kit]

I wonder if their charging for plastic bags has had an impact. Just after the change I asked a cashier in my local M&S and she said that had gone down very badly with customers and it had been her worst week of her life!

[bayesian]

Jim Naughtie, like most of the other Today presenters, has no facility with numbers at all. Only Evan Davies has, and it regularly shows. You'd think that they'd get good back-up researchers who might provide decent background material, but it seems the BBC has no interest in employing people who might be able to add reliably.

[dearieme]

I think I could eat one of Marks's pork pies.

[dearieme]

I think I could eat one of Marks's pork pies.

[kinglear]

The BBC of course has no interest in the real world, completly subsidised by us and free to persue its own (non-business) agenda. However, the clue to what has been going on at M&S was when a few weeks ago Rose ( and others) didn't get the bonus despite record profits. Any fund manager worth his salt should instantly have shorted the stock - or at least sold what he owned if you are a puritan

[Bruce]

They are too lazy to do the research and/or arrogant to think they can wing it. Weak business/economics interviews like this make me wonder how poor they are at interviewing people on subjects I personally know little about. I suspect that scientists, educationalists, health experts etc have similar gripes.

[Bob B]

Perhaps the illuminating insight is that, by reports, Jim Naughtie belongs to Gordon Brown's social circle up in Scotland.

[Bob B]

FWIW a further thought.

As both company chairman and chief executive of M&S, Sir Stuart Rose is surely inhibited by stock exchange rules about what he is able to say in public about the company's performance. In addition to stock exchange rules, there is also the potential threat of legal action by irrate activist shareholders. But exactly what inhibiting factors constrain James Naughtie?

A replay of what happened when Andrew Gilligan reported on the BBCR4 Today programme, in an interview by John Humphreys, that the government had been misleading Parliament and the public about all those weapons of mass destruction that Iraq was supposed to have?

Curiously, following the invasion of Iraq in March 2003, the UN inspectors never found any WMD.

[Tom P]

"Any businessman claims his failures are due to economic conditions and his successes to personal skill. This is not challenged sufficiently."

It's worse than that isn't it? Doesn't a lot of business reporting actually propagate this kind of stuff? A little narrative about a chief executive turning around a company is a lot easier to grasp than the more mundane reality of improvements to processes etc. And to be fair that would actually make really boring reading/listening/watching.

[Glenn]

In the Times (at least) this morning there was a better context/balance. People going to less expensive retail outlets for food, switching from M&S to other food retailers. And in clothing, all retailers have big sales on at the moment - except for M&S