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May 20, 2008

UK: M&S to sell Marmite, Heinz ketchup

Marks & Spencer, the UK retailer renowned for its own-label food, said today (20 May) that it will sell some of the country’s biggest brands, including Marmite and Heinz tomato ketchup.

Marks & Spencer, the UK retailer renowned for its own-label food, said today (20 May) that it will sell some of the country’s biggest brands, including Marmite and Heinz tomato ketchup.


The move, a step-change in food offering at M&S, was announced after the company unveiled mixed results for the year to 29 March.


Pre-tax profit rose 4.3% to GBP1bn (US$2bn) but a fall in like-for-like sales in the UK, including a dip in food sales, led the company to issue a cautious outlook for the year ahead.


UK food sales fell on a like-for-like basis for the second successive quarter and, in a bid to boost sales, M&S said 350 brands would go on sale in 19 stores in the north-east of England from June on a trial basis.


“This will enable customers to buy “must have” products such as Marmite, Heinz Tomato Ketchup, household products and toiletries,” chief executive Sir Stuart Rose said. “This trial aims to offer customers greater convenience but not to change the unique positioning of the M&S brand in food.”


The move is the latest bid from M&S to breathe fresh life into its food business. In recent months, the company has faced criticism from food manufacturers over a review of its supplier base.


Last week, Northern Foods, a key supplier to M&S, said it plans to close a ready-meals site following discussions with the retailer.


M&S insisted that the closure was not part of its drive to rationalise its food supply chain, adding that the closure was Northern’s decision. However, the company said it had found a supplier who can provide the meals on a more cost-effective basis.


Today, Sir Stuart said the review would enable M&S to have the “best base” to grow its food business.


“We have made progress in improving our operational execution,” he said. “During the year, we reviewed the entire supply base and renegotiated terms of trade with our suppliers to ensure we have the best base from which to deliver our planned future growth. We are targeting improvements in availability to drive our top line sales, control waste and to make our supply chain more efficient.”

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