Marks and Spencer 2010 Annual Report Download - page 30

Marks and Spencer Group plc Annual report and financial statements 2010 Directors’ report 26
What we sell
Food continued
Dine-in promotions remain one of the key
drivers of footfall and we continue to look at
new ways of encouraging our more occasional
Dine-in shoppers to become more regular
ones. For example, this year we extended this
promotional format to more everyday meal
combinations, such as casserole, mash and
vegetables for £5.
SERVICE
Range
We aim to deliver a service that matches
the high quality of our food and we are doing
this by listening and responding to our
customers. We know how important it is to
meet the needs of our regular shoppers,
giving them an enjoyable shopping
experience every time.
Feedback showed that customers love
M&S food and wanted to do more of their
weekly shop with us. To help them do this
we have broadened our food range by
extending our own label products such as
dried herbs and ingredients and introduced
a greater choice of frozen goods. Following
a successful trial, we are also rolling out a
selection of 400 carefully chosen branded
products to all our stores by the end of this
summer, so customers can now pick up
their favourite brands like Coke or Ariel,
alongside all the M&S ranges.
Branded products will be focused in
areas where we have lower market share
such as beers and pet food or where we
have no equivalent product, like Marmite.
Importantly, no M&S products have been
discontinued to make way for branded
goods. All branded products have been
price matched against the competition and
we are confident that any own label
equivalent products compare favourably
alongside these brands, demonstrating
clearly to customers the great value of the
M&S products.
Since launch, branded goods have been
a welcome addition, improving convenience
for customers and increasing the average
number of items bought during each visit.
Better availability
This year we have improved on shelf
availability largely through restructuring and
retraining our merchandising and allocation
teams. At the same time as delivering
improved sales and better availability we have
managed to reduce levels of waste. Over the
next three years we believe there is a big
opportunity to improve this further and we are
introducing new IT systems to improve our
forecasting and ordering processes.
We want to make sure we display
our ranges in the best possible way to
demonstrate the breadth of our offer.
We have now put in place a new Ranging
& Display team to ensure we achieve this.
INNOVATION
M&S is recognised as a leader in product
innovation and this year we have set
ourselves the ambitious target of renewing
25% of our total food range every year.
This keeps many customers coming back,
as they return to see what is new and
exciting in store. This year we launched first
to market ranges, pioneering products and
updated old favourites, as well as adding
1,700 new lines. In January 2010 we
launched Simply Fuller Longer – a new,
exclusive to M&S range developed with the
Rowett Institute at Aberdeen University, to
provide meals that are nutritious and keep
you feeling full.
SERVICE
Above: Hospitality Our customers can also enjoy
M&S food in store at one of our deli bars or M&S
cafés – the UK’s third largest coffee chain.
VALUE
Above: Budgeting – At M&S customers can
opt for Pork Sausages at 97p or Outdoor Bred
Pork Sausages at £2.69
VALUE
Last year we invested in margin to improve
our prices whilst maintaining or improving
the quality of our food.
We extended ‘Wise Buys’ to highlight
our great value on every day products with
guaranteed M&S quality. There are now
around 600 items in this range representing
about 10% of our offer, including milk, eggs,
bread and meat. We run a weekly price
check against the competition to ensure
they remain competitive and customers can
see this comparison in store on our price
tickets.
Over the last 18 months the wider food
market has experienced high levels of price
inflation. As we expanded ‘Wise Buys’ and
continued to improve our values, we were
the only food retailer to reduce prices during
this period.
Much imitated by competitors, our original
‘Dine in for two for £10’ promotion remains a
firm favourite among M&S customers. We
have built on the success of this promotion,
adding new lines and expanding the deal at
special occasions such as a Mother’s Day
roast dinner for four at £15 and a stunning
Valentine’s Day menu that included treats like
scallops, champagne soufflé, fine wine and
a gift. Over half a million couples celebrated
with the Valentine’s menu all for just £20.