Marks & Spencer under pressure , how to revive their food business?


M&S is under growing pressure to slash prices in order to stop the decline in its food business. 

M&S plans to create new superstores to try and bring families in for the big weekly grocery shop – competing directly against the likes of Sainsbury’s and Tesco.

Next to that its working to start selling its food online for the first time next year after it made a whooping £1.5billion deal with online food delivery company Ocado.

Chief executive Steve Rowe has called it the retailer’s ‘biggest and boldest’ move to date, in a desperate and final attempt to get results up.

The retailer is competing against the seemingly unstoppable rise of discounters Aldi and Lidl and several experts have warned that unless M&S thinks about reducing prices, its food division will not see any light at the end of the tunnel.

Richard Chamberlain, an analyst at RBC Capital Markets, said: ‘Prices across the board are going to have to come down.

‘If you look at their pricing I think they are more expensive than Waitrose on branded and own-branded products.’

In a recent survey of 50 products sold by Marks & Spencer and Waitrose, M&S came out 10% more expensive – despite this sruvey the company actually claims it is cheaper.
On the other hand there are also people that believe price reductions could take the company into unfamiliar territory and reduce quality.

An independent expert retail analyst, said: ‘M&S food sets out to be the highest quality among its main rivals. Broadly speaking, it achieves this. Consumers are not stupid. They understand totally that hierarchies of quality are mirrored in price. This applies to everything else in their lives, so why shouldn’t it in food purchasing?’

‘M&S food is qualitatively better than anyone else’s in the market. Its prices should be higher.’
Stuart Machin, managing director of M&S Food, has already begun lowering prices across M&S’s products and is trying to get more and more families to shop at M&S. His latest plan will see new bigger stores of up to 15,000 square feet showcase the company’s full range of 6,500 products.

Areas devoted to clothing will be reorganised to sell food as the company tries to shake off its image as a food shop for singles and couples, office workers and the elderly.


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