Marks and Spencer 2008 Annual Report Download - page 13

marksandspencer.com/annualreport08 MARKS AND SPENCER GROUP PLC 11
Womenswear
and lingerie
In 2007/08 we strengthened our position
as the number one brand for womenswear
and lingerie, despite a tough second half,
by doing what we do best. From classic
and tailored looks, to fast fashion inspired
from the catwalk, we demonstrated that
‘Every Woman, Every Time’ is at the heart
of our womenswear and lingerie plan. In
short, it’s our commitment to help every
woman – regardless of her age, size and
budget – to find stylish clothes that are
beautifully made, at great value prices.
Our performance
During the year, value market share in
womenswear fell from 11.3% to 11.1% in
the face of tough competition on the high
street, strong downward pressure on prices,
and a slowdown in customer spending.
However, volume market share remained
steady at 10.0%. We achieved this by looking
closely at our price structure to ensure our
competitiveness at opening price points.
Marketplace trends
In 2007/08, the retail market
continued to grow, but at a
slower rate than previous
years. Increasing levels of
debt and household bills have
had an impact on consumer
confidence, which is at its
lowest point since 1993
(GfK research). The growing
demand on disposable income
has also seen customers
prioritise essential bills at
the expense of shopping
and leisure activities.
Generally, customers
continue to look for more
choice and convenience.
As a result, the trend for
shopping online has
increased, partly due to
greater customer confidence
in payment security and
delivery. Retail parks and
out-of-town shopping centres
have also grown in popularity,
offering greater breadth
of choice in products and
shopping formats that fit
around customers’ differing
needs and busy lifestyles.
Looking specifically at the
clothing market, sales have
been the hardest hit by the
recent decline in customer
confidence – slowing through
the last quarter of 2007/08
and now in decline on the
year (TNS market research).
In a change to last year,
customers have started to
spend more on individual
items of clothing, investing
in a few key pieces that
offer versatility and can
be dressed-up or down.
As a result, value growth
is marginally ahead of
volumes. The exception to
this is in womenswear where
customers continued to buy
‘more for less’ driven by a
desire for fast fashion and
multiple looks.
Despite a slowdown in the
housing market, there was
generally strong growth in
homeware sales as customers
updated their homes, rather
than move house. Specifically,
electronic goods continued
to sell well across the
industry, as price deflation
of the latest ‘must-haves’
made them more accessible
to more people.
The food market held up
primarily through price
inflation and customers
buying more premium
products. Customers have
become savvy in shopping
across different outlets to
make the most of their food
budget – carefully choosing
‘what they buy where’ from
the basics, to treats.
The growing trend for fresh
ingredients has continued,
with customers looking for
key ingredients to cook from
scratch, or quality products
that allow them to assemble
a fresh meal. The increasing
profile of food sourcing and
animal welfare issues, has
also encouraged them to
trade-up to products that
are free range and organic.
In the year ahead, the trading
environment will be tough.
Customers will feel ongoing
pressure on their personal
finances. In these challenging
conditions, they are expected
to turn to trusted, well-
established brands that
provide reassurance they are
spending their money wisely.
A few of our favourite things...
Lingerie
We offer 78 bra sizes, from 28AA
through to 44J, and are the only
high street retailer to offer machine
washable silk lingerie.
Cashmere
Selling at £49 in 2007/08 (down
from £69 in 2006/07), we sold
more than one cashmere item a
minute during our busiest week
in London’s Marble Arch store.
Leather
From biker jackets to our famous
Little Black Dress, we introduced
affordable leather in line with the
latest catwalk trends.
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