Marks and Spencer 2012 Annual Report Download - page 23

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Strategic review
Focus on the UK
Marks and Spencer Group plc Annual report and financial statements 2012 21
Overview Strategic review Financial review Governance Financial statements and other information
Food
“ Our new Food
Halls showcase
the quality and
innovation that
make M&S food
truly special.”
John Dixon
Executive Director, Food
Our Food business performed strongly in a tough market with total sales up
3.9% to £4.7bn and like-for-like sales up 2.1%. We maintained our focus on
freshness, speciality and convenience and continued to lead the way with high
quality, first-to-market products. Our customers benefited from greater choice
across all our ranges – and our heritage of innovation kept them coming back
to find something new and exciting in our Food Halls.
improving the usual appeal of our food
offer. The new Food Halls deliver an
exciting visual experience for customers
that showcases the outstanding quality
and freshness of our products.
Quality and value
Customers tell us that the quality of
our food sets us apart from our
competitors. During the year we
improved the quality of many of our
existing products, without increasing
prices. For example, we made one of
our all time lunch favourites even better
value, adding 40% more prawns to our
Prawn Mayonnaise sandwich. This
increased sales by 21%. We also
launched improved versions of our
great value top-selling products, such
as our Quiche Lorraine with 40% more
cheese and 20% more bacon.
Customers noticed this upgrade and
independent quality scores increased
as a result.
From our commitment to sustainable
fishing to our Fairtrade partnerships, our
close working relationships with
suppliers help us deliver food that is
ethically sourced and of the highest
quality. Our high standards of animal
welfare were recognised this year, with
a Sustained Excellence award in the
RSPCA Good Business Awards 2011.
As part of Plan A, we also source as
much food as possible from the UK and
the Republic of Ireland. This year, we
delivered record sales of English-
sourced fruit, including the first ever
English grown Rainier cherries; a much
sweeter variety, which has previously
only been available from US growers.
Actions against our plan
Reinforced our position as a specialist
food retailer
Increased the number of product lines
Improved in-store availability
Introduced 100 new international
brands, available only at M&S
Overview
Household budgets were under
increasing pressure this year. However,
customers remained loyal to M&S,
trusting us to deliver great quality and
exceptional value – especially at the
most important times of the year. They
also ensured that special occasions
were ring fenced and were determined
to enjoy important occasions such as
Christmas and New Year.
Deals were important to customers
looking to control their spending,
without compromising on quality. We
responded with high-impact, simple
deals such as our 3 for £10 offer on
meat and fish and the much loved
Dine In, providing stand-out value in a
heavily promotional marketplace. We
also made efforts to protect customers
from much of the inflation in commodity
prices through better buying, more
efficient stock management and
improved operations.
During the year we also embarked on
an exciting programme of changes to
our Food Halls, reinforcing our status as
a specialist food retailer and clearly
differentiating our already strong
proposition. We relaunched our in-store
bakeries and introduced new deli
counters to some of our stores,
Plan A: Healthier milk
Working with our dairy
farmers we developed Better
For You milk, containing 6%
less saturated fat than
standard milk. Altering the
cow’s diet using only
wholesome ingredients
– such as grass, maize and
rapeseed – helped improve
herd health and fertility. Just
one year will help remove 84
tonnes of saturated fat from
our customers’ diets.
Revenue
£4.7bn
3.9%
Market share
3.8%
level
FOOD HIGHLIGHTS
Promotions
The gourmet Dine In for £20
promotion for Valentine’s
Day – featuring a premium menu and
an extra course – delivered a record
performance, with almost 700,000
couples enjoying a romantic meal
at home.