Subsequently M&S will be slowing their planned expansion of Simply Food, opening 80 new stores next year (as opposed to the planned 90), 50% of which will be franchised. There are moves, however, to revitalise the food division through innovation, sharpened prices in core categories to bring out value and step changing availability and seasonal ranging. These price cuts reflect the company’s unwillingness to pass rising commodity prices onto the consumer. The online home delivery market is also a growing share, although the Amazon takeover of Whole Foods could pose another threat to M&S.
M&S’s aim to reposition the food division for future growth could see further growth in the home delivery market, as well as a reduction in promotional deals, with emphasis on relevant innovation. Rising commodity costs could pose an opportunity for the British food and drink sector as M&S moves to emphasise seasonal produce and convenience that does not skimp on high quality food. It is clear that management understands the challenges facing the wider food sector, and the M&S food division, and they appear ready to take on both discounters and the ‘big four’ supermarkets. Despite a tough October across the retail sector, Chief Executive Steve Rowe seems to be looking forward to Christmas, saying ‘We will trade Christmas as we always do and we're looking forward to giving our customers a treat.’
You can find the full version of M&S’s trading report here.