Marks and Spencer 2015 Annual Report Download - page 28

26
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT
FOOD
PERFORMANCE OVERVIEW
Following another ver y strong year in Food,
we have now seen 22 consecutive quarters
of like-for-like sales growth. Our mantra has
been to become ‘more relevant, more often’
for our customers. We have achieved this
through our constantly evolving ranges, our
quality and our innovation. We continue to
excite people with our products, whether
they are doing the weekly shop, buying for
tonight or picking up a treat for a loved one.
At M&S we have a Food business that is
ambitious in nature, adventurous in scope
and growing in size, highlighted by us
outperforming the market by 3.5%.
QUALITY AND PRICE
Our industry-beating growth springs from
our focus on the provenance, taste and
excitement of the food on our shelves. We
have maintained a competitive stance on
price. For example, this year we refused to
match the industry in cutting the price of
milk. The reason is simple: our milk is better
than our competitors’. At M&S we will not
compromise on either our quality or
our relationships with our farmers. We
independently taste test all our food and
upgrade or eliminate any product that does
not exceed our rivals’ equivalent. We know
that customers like this stance. As a result,
we are growing our market share.
INSPIRATION
This year we introduced 1,700 new products,
equivalent to over a quarter of our entire
range. Our teams of technologists, chefs
and nutritionists searched the world for
interesting new food ideas. Thanks to the
longstanding bond of trust between us
and our customers, we can be counted on
to source the most exotic and authentic
fl avours. Popular new lines included our
Taste range of cuisine from Thailand, Mexico,
Vietnam and Japan. Whether customers
wanted a pho or a taco, a gyoza or a pad thai,
we had it covered. We al so launched our
39-strong Frozen Meals range, which fi rmly
destroyed the notion that ready meals are
limited to lasagne and cottage pie, with
new dishes including Slow Cooked Chicken
and Chorizo Stew and Pulled Pork with
Potato and Kale Hash. The convenient dishes
showed customers that a busy lifestyle
shouldn’t be an impediment to a delicious
meal. We continued to perform particularly
well on special occasions, from Valentine’s
Day to Christmas. Our Collection range of
gifting and chocolate treats saw sales rise by
27% over the festive period.
STORES
Our store opening programme continued at
pace. This year we opened 62 Simply Food
stores in the UK and ten overseas. We also
upped the opening target set in 2013/14 of
200 new stores by 2016/17 to 250. The Simply
Food format pl ays into evolving shopping
habits. People are shopping more regularly
and more locally, meaning that our
convenience format is one of our key
di erentiating factors. In terms of our
in-store environments, we updated the look
and feel of our stores, introduced chefs and
increased the roll-out of Deli counters,
adding theatre to the shopping trip.
SUPPLY CHAIN AND INTEGRITY R
We continued our programme to rebase our
supply chain. By streamlining our processes,
optimising volumes and consolidating
factories we have generated e ciencies
and s avings. We h ave reinvested this money
in price and quality, and also shared it with
suppliers to help them create further
e ciencies, thus establishing a virtuous
circle. Nothing is more important to us
than food safety and we have led the way
in reducing campylobacter in our poultry,
a stance which has been endorsed by the
Food Standards Agency.
SUPPORTING OUR COMMUNITIES A
Food waste is a key concern for our
customers. Our priority is to reduce food
waste whilst ensuring that, where there is
food sur plus, we put it to the best possible
use by working with redistribution partners
like FareShare and Community Shop.
The fi rst social supermarket in the UK,
Community Shop, gives shoppers on the
cusp of food pover t y access to surplus
products that would otherwise have been
wasted. We believe supporting communities
in this way is the right thing to do.
Our mission in Food is simple: inspire
our customers with high quality, great value
products in stores full of new ideas.
STEVE ROWE EXECUTIVE DIRECTOR, FOOD
1. Our relaunched ‘Adventures in…’
brand marketing campaign
pioneered new camera techniques
and won us a raft of awards.
2. Our Dine In deals continued to grow
in popularity. Over the Valentine’s
weekend, 830,000 couples enjoyed
our menu.
3. As the market-leader in healthy
meals, our share of the market is
44% and we sold 40 million meals
from our healthy ranges.
Note 1 In January 2015 Kantar Worldpanel changed its methodology for recording M&S variable weight barcodes and as a result historical market share data was
reprocessed and adjusted. The market share data used in this report is based on these updated fi gures. This data is not comparable to any published before January 2015.
£5.2bn
UK FOOD REVENUE
+3.4% +0.1%
4.1%
MARKET SHARE1
1,700
NUMBER OF NEW LINES
2. 3. 1.
OPERATING PERFORMANCE