On the money: M&S looks to differentiate through innovation
M&S focuses on food innovation
Marks and Spencer has indicated it is looking to differentiate its food offering from that delivered by UK supermarkets, with a focus on innovation and quality to drive growth.
The company today (6 November) reported like-for-like food sales rose 3.4% in the six months to 29 September, a positive note in a set of results that included a fall in group sales and profits.
Commenting on the result in a webcast to investors, chief executive Marc Bolland said food "has done tremendously well" and described sales as "very strong" over the six-month period.
Increased revenues have been driven by product development and innovation, with 1,000 new lines introduced over the last six months, Bolland said.
However, Bolland was quick to emphasise M&S remains focused on targeted quality innovation in food that allows the retailer to differentiate itself from the UK supermarkets, who are more price focused in the current economic environment.
"If you look at 1,000 lines it's not in the number, it's about the quality of innovation...What I like about the approach that we've taken in our food department is we do innovation that is distinctly different than supermarkets with a quality level that is completely different, at a very acceptable price," he commented.
Bolland highlighted M&S's new Asia range as an example of the group's drive to innovate in food. "If we bring our new Asia range out there we see a range that already sold half a million items and this is not selling a product, this is selling a concept of a completely new kind of convenience food."
Indeed, according to Conlumino analysts, the "key factor" underpinning the "impressive performance" in food is the group's "focus on innovation and quality".
In an investor note, Conlumino said this focus was evident in M&S's ability to react to national occasions - such as the Jubilee - with product development, while the company has "upped its game" with the introduction of food counters in some stores.
"In many ways, food is the business that the clothing side of M&S needs to imitate. It has an excellent grasp of its customer base, continually reinvents itself to remain interesting, and manages to outpace much of the competition in a very fast paced and high pressured retail sector," Conlumino wrote.
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