Marks and Spencer chief executive Marc Bolland has said the UK retailer has no plans to launch a full online grocery service.
Under Bolland, M&S is reshaping its business to become an “international, multichannel retailer”.
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Consumers can order a limited range of food online and pick it up at M&S’s stores. However, after Morrisons announced on Friday it would start home deliveries in January, some in the City have speculated on whether M&S, the only major UK grocer not to offer a full online grocery operation, would expand its service.
Nevertheless, speaking to reporters after M&S announced its annual results, Bolland dismissed the notion of the retailer starting home deliveries.
Bolland suggested M&S’s relatively small basket size compared to UK supermarket chains meant the business case for a full online launch did not stack up.
“We know you need to have GBP100 (US$151), GBP120 to do it in any way affordably. Compared to that, our baskets are a top-up shop – a basket of GBP20, GBP30, GBP40,” Bolland said.
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By GlobalDataThe M&S boss insisted a factor in the recent solid performance from the retailer’s food business was its focus on innovation. He said M&S had launched 2,000 products in the year to 30 March and had worked to get consumers to visit the retailer’s stores to appreciate its product development, which, he indicated, would be less possible with a full online service.
“We are the fastest growing retailer by far with our food business. Part of that is that we have concentrated on getting people in our stores to see the innovation themselves. The 25% churn of our ranges [compares to] a supermarket churn [would be] no higher than 3-4% in their stores. With us, people come and see and want to be surprised,” he said. “They really want to see, feel and touch. There is no need for us to go online.”
The M&S boss set out to expand the retailer’s multichannel presence when he took the hot seat in 2010. Reflecting on that decision today, he said the move was necessary because “the world is online”. He also described marksandspencer.com as the retailer’s “flagship store”. In its last financial year, multichannel sales increased more than 16%.
However, a full online grocery launch seems off the table. “It’s important for people to go to stores to see what innovation we have in a business that churns. There are no plans to go online.”
