As we leave 2023 behind, we look back at Grocery Gazette’s best bits. Today, we delve into M&S’ dramatic transformation in food.
M&S Food has undergone quite the revamp over the past year or so.
Its efforts have been wide-ranging, from enhancing its quality credentials to putting greater effort into offering value, and improving the in-store shopping experience.
They have certainly paid off as grocery is spearheading the retail stalwart’s long-awaited turnaround.
In the first half, its food business’ adjusted operating profit more than doubled to £164.9m and sales jumped nearly 15%.
For CEO Stuart Machin, this is just the beginning as M&S Food remains “ambitious for future growth”.
We look at how the retailer has achieved this success and what it needs to do to maintain it.
A greater focus on value
Over the past year, M&S has ramped up its value offer as it seeks to become a retailer for more than just a ‘few treats’, but somewhere shoppers can do a full shop without fear of breaking the bank.
In May, Machin said M&S’ value perception is “the strongest it’s been in history” and following its half year results, the retailer has invested more than £30m in price.
This has been seen most recently with 140 popular food products price locked in September and the prices of 200 more slashed in October.
Its Remarksable Value range, which promises everyday low prices, has also resonated with shoppers and is competitive on price with the traditional supermarkets.
Detail Business Consulting managing director Paul Meechan says that to its loyal consumer base, M&S “has always been seen as offering value, and to cut prices to offer better value is a substantial plus point in the nation’s psyche”.
Retail consultant and ex-John Lewis customer experience director Peter Cross says that M&S would have to be “tone deaf” not to focus on value in such a highly competitive market.
However, he believes the dual focus on value and quality “sets it apart”.
“While there are competitors that are just focused on value, M&S’ strategy lets shoppers know they can get quality, experience and environment while also making sure they can get it at a price that reflects the financial challenges they are currently facing.”
Maintaining quality credentials
The upmarket retailer prides itself on offering first-rate food and for Cross, the last year has been no exception as M&S has “really held on to this notion of quality”.
Global Data lead retail analyst Nick Gladding says marrying quality and value can be difficult but believes the retailer has cracked it.
“It’s a tricky thing to pull off, but M&S has demonstrated that it is able to appeal to both camps. Investments in the Remarksable value range and well-targeted price cuts have helped to boost its value position and drive volumes, while quality perceptions have continued to improve.”
He says M&S has clearly invested to strengthen its product ranges, and adds that its partnership with Michelin-starred chef Tom Kerridge “has helped to refresh quality and innovation messaging”.
M&S’ most recent food campaign with the celebrity chef showcases the brand’s “leading quality” across both food and animal welfare as Kerridge visited a variety of farms.
Food and hospitality marketing director Sharry Cramond says the campaign has allowed M&S “to shout about what really sets us apart from other supermarkets when it comes to quality and ingredients”.
The launch came at the same time that Asda unveiled its ‘Taste Match’ to promote its own product credentials, with the slogan “M&S taste at Asda price”.
The big 4 grocer claimed that hundreds of its products were voted “as tasty” or “tastier than” their M&S equivalents but at a lower cost, following thousands of blind taste tests.
Machin was quick to hit back branding it a “marketing gimmick”.
I always find it strange when retailers use other brands for their advertising. At M&S, taste without values is not quality in our eyes. When it comes to product, we constantly strive to lead the way on quality, welfare, and innovation with no ‘nasties’. Others have tried to copy…
— Stuart Machin (@MachinStuart1) September 30, 2023
However, Cross believes that Asda’s campaign is actually positive for M&S.
“To be held as the benchmark does just as much good for M&S at the same time,” he says.
Gladding also points out that M&S has also switched up its marketing to appeal more to younger shoppers.
He notes that the likes of ex-Love Islander, boxer Tommy Fury, becoming a brand ambassador “has the potential to bring across his five million Instagram followers to M&S”.
Investing in physical retail
M&S has been loud and proud of its ongoing store rotation programme, which will see it make a £480m investment in bricks and mortar.
By the 2027/28 financial year, it aim to have “higher quality, higher productivity” stores across both its food, and clothing and home businesses, moving from a base of 247 shops to 180 full line stores alongside over 100 bigger food sites.
Machin says the programme is about “making sure we have the right stores, in the right place, with the right space”.
“Our investment in stores not only delivers a better experience for customers and colleagues, it boosts local communities with new job creation and will help us deliver a more sustainable estate in every sense.”
Its new stores, and particularly its market-style food halls are certainly impressive.
Cross believes it is a positive move for M&S’ growth as physical retail is “back on the map”.
However, he adds that for this to succeed, the food and fashion sides of the business really need to connect.
“They feel like different businesses and that means the customer crossover is likely to still be not where it needs to be. It’s not leveraging the power of having a food business to drive traffic into the fashion or the home business and that’s hard yards.”
IGD global insight leader Bryan Roberts also expresses potential concern in terms of store closures, particularly those in town centres.
“This process is great for M&S and great for those shoppers that have a car but there are some shoppers in communities that M&S has left that simply cannot get to the newer stores.
“Clearly, though, these gaps could be backfilled through smaller food halls over time. M&S has been quietly assembling a chain of the best food halls in the business and this augurs incredibly well for it indeed.”
How can M&S maintain its growth in food?
In looking to maintain this growth, Roberts says M&S needs to “simply do more of the same”.
“There is no reason why M&S shouldn’t successfully defend the market share it has won and any easing in the cost-of-living crisis should see it prosper further. A worry might be some sort of resurgence from Waitrose, but overall, it is extremely difficult to be pessimistic over M&S’ performance in food over the next few years,” he says.
Cross agrees. “It needs to keep doing more of the same, which is seeing quality through a holistic lens. Quality is everything from the product, to the packaging, to the shopping experience, to the service.”
However, he suggests that M&S could improve its loyalty scheme, arguing it has one of the “lousiest” on the high street in terms of its proposition.
Roberts adds that according to IGD’s shopper research “the Sparks loyalty scheme is less compelling than those offered by rivals”.
Despite there being this slight room for improvement, it’s apparent that the future of M&S Food is overwhelmingly positive.
Cross adds that while “a lot of the success possibly comes from the fact that others may be struggling, M&S is increasingly carving out a place for itself as the alternative to a value-led shop.”
As inflation continues to ease, this should serve it well in the years to come.
