M&S online wine business must double sales to make a profit

Marks & Spencer has said it will need to more than double the size of its wine e-commerce business if it is to become profitable.

Although online accounted for 10% of M&S’s total wine sales and was in double digit growth, the retailer didn’t currently make any money out of selling wine online, admitted Andrew Bird, head of trading for grocery & drinks, this week.

Speaking at the inaugural Wine Vision summit organised by The Grocer’s publisher William Reed Business Media, he said he was confident the online business would become profitable but it would need to become more than two and a half times its current size.

Developing click & collect in-store would be a crucial element, he said, and M&S was currently exploring options for a click & collect operation in the New Year.

“It’s a profitable way to sell wine - more profitable than people coming in store and picking [single bottles] off the shelf,” said Bird.

“It is also important to get beyond the idea of home delivery, which is difficult to make money on,” he added.

Bird later told The Grocer that making online wine sales a “genuinely profit-enhancing offer” was achievable in the medium term. “I am determined to do it,” he said. “There is a clear plan and glide path to the point at which you are cash-positive in selling wine online.”

M&S also revealed that it was moving its wine website from the current Amazon platform to one fully owned by the business early next year.

“Amazon is too transactional, we want to be more inspirational,” Bird said. The new site will be designed to be easier to navigate, engage better with consumers and provide more information on the personalities in the M&S wine team.

“We want to bring magic to the consumer and put clear blue water between us and competitors,” Bird said. “We can’t afford not to do it.”