Marks and Spencer is to bolster its ailing food business by opening new stores and focusing on improving quality and value for money.
The chain, which has finally confirmed acting food director Guy Farrant will be continuing in the role full-time, said food sales were up 2.4% to £3.5bn in the year to April 2. However, analysts predict a dreary outlook for the coming year as like-for-like sales tumbled 2.6%.
Despite the 19% slump in the chain’s overall pre-tax profits to £618.5m, chief executive Stuart Rose is convinced the company has a platform to grow from.
Availability, tilling, and in-store ambience are all to come under the spotlight, and the refurbishment of 21 food halls with a new-look design is planned after four successful trials. The pale green fittings have been shed in Shoreham, Sutton, Basingstoke and Edgeware Road, and replaced with black marble floors, black equipment, and better lighting, while the chain is aiming for a market feel with tiered stands and large blackboards.
M&S plans to open 10 new department stores in the next year as well as 30 Simply Food formats. It has also announced a pilot of eight Simply Food stores in BP Connect forecourts this autumn.
Rose said: “The BP trial is a great opportunity to investigate the potential for expansion of this format. If it works it will extend our foods to a much wider audience.”
Tesco has confirmed that it is to trial its first non-food-only outlets over the next 12 months, with the Homeplus store format to debut in Aberdeen and Manchester in October.
The stores will resemble the Extra format but without the food, and will include TVs, toys, books, bedding and beauty products, as well as its full range of clothing.
Suppliers too often use foodservice as a way of filling excess capacity, fielding weak account managers and listing inappropriate products, says a report. Its author, Ian Crabtree of foodservice consultancy ISC Associates, said that manufacturers should treat the sector the same as they do retail.
The scientific impartiality of the British Nutrition Foundation - which advises the government on dietary issues - is being challenged by MPs. Environment secretary Margaret Beckett is under cross-party pressure to order an investigation into the advisory body, whose funding comes mainly from the food industry.
Grocers have boosted their share in non-food sales by 57% over the past five years, according to retail analyst Verdict, with sales reaching £13.5bn in 2004.
Efficient supply chains, scale advantages, and willingness to listen and react to demands are enticing consumers to spend in grocers, who in turn are extending their ranges of non-food offerings.
The MoD is trialling a new retail management system in three of its 200 UK c-stores, formerly run by Naafi, to improve availability and boost sales.