Marks and Spencer 2009 Annual Report Download - page 27

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23
Home
The general slowdown in the housing market and a freeze in mortgage
lending have prevented people from moving, encouraging them to make
the most of their current homes. This has led to many High Street closures
which further impacted on consumer confidence.
So while spending on ‘big ticket items’ such as furniture and white
goods has fallen, there has been a marked rise in home improvements
goods to spruce up the home. Entertainment goods such as televisions,
laptops and video gaming consoles sold well in 2008/09, reinforcing the
trend to stay in – although in the early months of 2009/10 many retailers
have reported a softening of sales in this category.
Food
Customers are experimenting with food shopping both in terms of the
supermarkets where they shop and the type of food that is bought.
They are relying on supermarkets to guide them to smart choices and to
clearly offer unbeatable value. This desire for low cost food has spurred many
supermarkets to reposition themselves as ‘discount’ providers – seducing
customers with one-off offers or multi-buys.
Key trends include:
Customers trading down either to a different supermarket, or switching
to own label or value ranges within their favoured supermarket.
Rising raw material costs are filtering through to the supermarkets with price
inflation now being passed on to customers. Customers are attempting to
off-set this through clever shopping, by making use of deals.
Customers are treating themselves less. When they do, they are seeking
out comfort food, or they are indulging in restaurant quality ready meals.
Cooking from scratch has become increasingly popular as a way to enjoy
great food at home and to budget more effectively.
Online
Although online continues to be a key growth area for retailers, conversion
rates slowed during the year, with customers increasingly using websites to
browse and look for a bargain. To convert these browsers to buyers, online
retailers offered free delivery and online deals. Websites continued to evolve,
to satisfy customer demands for a more personal and engaging experience.
Established players are being challenged by specialist players such as
ASOS and Net-a-Porter that sell well-known brands.
Sep 04 Dec 04 Mar 05 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09
MARKET FOCUS: M&S RESPONSE
Top: Our Improve Don’t Move campaign
was a direct response to the housing market
slowdown, and provided a strong uplift to core
home goods sales.
Above: Our Wise Buys label is now on more
than 500 products, from ready meals to fresh
fruit and veg, so our customers can economise
– not compromise.