Marks and Spencer 2007 Annual Report Download - page 19

We continue to provide customers with delicious, high
quality, innovative food sourced both responsibly and
sustainably.
It is a credit to our food team and suppliers that we’ve
produced our best ever period of sustained growth in recent
history. In 2006/07, total food sales grew at twice the market
rate at 9.7% to £3.97bn. Sales from existing stores grew by
4.2% on a like-for-like basis and we reached more customers
through new stores and formats, particularly Simply Food
stores. Total market share grew to 4.3%, its highest ever level.
Although competition is fierce and food trends are changing
faster than ever, we are confident we can continue to
make gains.
New trends in eating
Around seven million people buy food from M&S each week.
Given our relatively small share of the UK market, we are already
reaching a wide audience, attracted by our outstanding quality
offer, convenient locations and mouth-watering advertising.
People shop with us for a wide range of reasons. For some
customers, M&S simply stands for high quality food from
trusted sources. Some just love food and like the way we
interpret new eating trends in our prepared meals. Others want
high quality traditional ingredients to make their own dishes. For
many people, M&S is a place to come at special times of the
year and for indulgent treats; and for others M&S stands for
great food on the go. For all of these customers, different food
trends are important and we must stay a step ahead of them,
using great innovation to meet their changing preferences.
The trend in healthy eating shows no signs of easing. Demand
for fresh, natural food as well as the healthy prepared meals, at
which we excel, is rising fast. But indulgent products are also
in high demand such as our ‘Gastropub’ range and special
desserts, like the recently advertised lemon soufflé, which has
been very successful.
Provenance is important. Increasingly, customers want to know
precisely where their food comes from – right down to individual
farms and growers. Customers want assurance that their food
has been sourced ethically – with proper care taken over
nutrition, fair trading, the environment and animal welfare. And
they want it to be labelled clearly and packaged responsibly.
Fresh, natural and healthy
Healthy eating is a priority for us and our customers. Facilitated
by our 100% own-brand offer, our work to remove unnecessary
ingredients from our products is industry leading. In 2006, M&S
became the only major retailer to have removed hydrogenated
fats from all our food and we remain ahead of the industry in
reducing salt.
We are also continuing to meet the growing demand for fresh
food which has had the minimum of processing. Our ‘Marks &
Spencer Cook!’ range, our ready meals and all of our ‘Eat Well’
children’s prepared meals are now free of artificial colours,
flavourings, sweeteners and have no added preservatives. All of
SOURCING AND SUPPLY CHAIN
www.marksandspencer.com/annualreport2007 MARKS AND SPENCER GROUP PLC 17
We have always worked
closely with suppliers to
produce great food
responsibly and sustainably.
Because our food is 100%
own brand, we can do this
with real authority.
We had already improved
animal welfare standards
with breeds like ‘Oakham
Chicken’ and ‘Muir Den
Pork’ which are less
intensively farmed. As part
of our Plan A commitments
we will convert our fresh,
whole turkey, goose and
duck to free range within
the next 12 months. We
have also committed to
convert our fresh pork to
free range as well. We are
also working with the
Marine Stewardship
Council and other
organisations to achieve
independent accreditation
for the fisheries we
source from.
We want to be a fair
partner to all our suppliers
and in February 2007, we
increased the price we pay
for milk under our ‘Milk
Pledge’ scheme, which
guarantees farmers a
fixed price for their milk,
giving them greater
security. In 2007/08, we
will be consulting with
farmers on ways to extend
this scheme into other
product areas.
Under Plan A we will
reduce the proportion of
food we air freight.
Additionally, we have
started to introduce an
aeroplane symbol onto
packs of products that
we do air freight.
To help our suppliers to
make changes in their
own businesses, we are
introducing a web-based
Supplier Exchange.
Together we aim to share
best practice, stimulate
innovation and help
suppliers secure funds for
investment.
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