UK: Northern Foods and fellow suppliers unfazed by threat of M&S restructure
Yesterday's news that struggling high street retailer Marks and Spencer is mulling a reorganisation of its food operations threatened to send shock waves amongst its British suppliers. A similar restructuring effort that has focused on M&S' beleaguered textiles department since 1998 has seen major cutbacks of its British suppliers in favour of cheaper alternatives overseas. British food suppliers were calm however today, denying that they could be affected by M&S' latest penny-pinching attempts to boost profitability.
Supplier majors such as Northern Foods, whose products include Munch Bunch yoghurts and Goodfella's pizza, Geest and Uniq are quietly confident that no matter how bad things get at M&S, the company can simply not afford to skimp on quality food. Globalisation may be M&S's greatest tool in cost cutting, but the manufacturers point out that while clothes can technically be made anywhere, taste discrimination, delivery logistics and quality issues protect them from the chop.
While acknowledging that M&S has been rationalising for some time, the CEO of Northern Foods, Jo Stewart, admitted that the process was actually benefiting Northern with contracts for new lines. "This is work in progress for the last 24 months, and they told us two years ago," he added.
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