Marks and Spencer 2008 Annual Report Download - page 9

marksandspencer.com/annualreport08 MARKS AND SPENCER GROUP PLC 7
February 2008
Carrier bag charging
A 5p charge for food
carrier bags announced,
to be introduced in M&S
stores from the beginning
of May. All profits to go
to environmental charity
Groundwork.
Finally, owning 70% of our assets and having relatively low
gearing means M&S has one of the strongest balance sheets
in the retail sector. Ian will discuss this further on page 9.
1. Investing in our core UK business
Product
Our core UK business comprises the individual business units
of womenswear, lingerie, menswear, kidswear, home and food.
In 2007/08 we made good progress in each business unit.
In womenswear and lingerie, the emphasis was on our
segmentation plan, where we clarified our sub-brands (such as
Autograph) to help our customers quickly and easily find what
they’re looking for. Further work is needed this year to ensure
customers feel comfortable in shopping for their requirements.
At the same time, ranges were continually refreshed so that
customers can always find something new. This adds up to
what we call ‘Every Woman, Every Time’ – where we make it
easier for our customers, regardless of their age, size and
budget – to find clothes that are beautifully made, stylish and
offer great value for money.
Work to segment our sub-brands was also central to the
kidswear plan, as we took important steps to win back
market share.
In menswear and home, changing customers’ perception of
value was the focus as we competed hard on opening price
points (with home prices at almost 12% below the high street
average), while improving ‘better’ and ‘best’ products for the
more aspirational shopper.
In food, we delivered against our commitment to provide food
of the highest quality without compromise, with a focus on
provenance, innovation and health.
Brand stretch
Our brand is strong, and in 2008/09 we believe we can build
on the trust it inspires to offer our customers better service and
more of what they want through ‘brand stretch’. For instance, by
featuring plus sizes online; offering bespoke Made to Measure
shirts for men; and expanding our in-store hospitality options.
Additionally, while M&S will always be essentially an ‘own
brand’ business, we believe we can add significant extra
value, by partnering with guest brands that complement our
values. In the last year, this was predominantly with trusted
technology brands in home, such as Sony and Apple. In food,
where we face strong competition, customers tell us that time
and convenience are key drivers. During the summer we will
therefore trial the sale of up to 350 branded food products –
such as Marmite, Heinz tomato ketchup and other branded
‘must haves’ – in a small number of stores. We will roll this
out if successful.
Service and store environments
In addition to our products, we have continued to improve
the quality of our service and store environments.
In service, during 2007/08 our store colleagues sold record
volumes, while simultaneously improving their scores in our
mystery shopping programme – achieving an above average
score of 86%. It’s to their credit that we continue to be seen
as one of the high street’s best customer service providers.
We’ve invested behind the scenes in our IT and logistics
infrastructure in order to maintain service efficiency. In 2007/08,
as well as delivering 13% more stock to our stores than in
2006/07, our logistics network responded to a 63% rise in
volume from M&S Direct. The plan has helped us to develop
faster and more efficient IT systems throughout our business.
For instance, we are introducing new point-of-sale systems,
including more than 2,000 new tills and 258 new hand-held
terminals in-store to make stockchecking easier and more
efficient. Ian will discuss this further on page 9.
While our IT and logistics improvements help support our stores
to run more efficiently, our store modernisation programme is
improving our shopping environments (see page 24).
2. Strengthening the UK property portfolio
We are undertaking one of the biggest store investment
programmes in the UK; modernising and expanding our existing
footage (with 70% now complete); increasing the number of
stores we have; and ensuring we offer the right stores in the
right locations. We will modernise a further 10% this year.
About us
Key performance indicators Business review Financial review Governance Financial statements
Shareholder information
April 2008
Artificial colours and
flavourings removed
M&S becomes the first retailer
to remove all artificial colours and
flavourings from its entire food
and soft drinks range.
May 2008
Eco factory launch
M&S suppliers launch two
eco factories in Sri Lanka.
They will produce per una and
Autograph lingerie exclusively
for M&S.
January 2008
Oxfam Clothes
Exchange
Exchange launches to
reduce the 1 million tonnes
of clothing sent to landfill
each year in the UK, and
raise funds for Oxfam’s work
to tackle poverty and injustice.