Marks and Spencer said it is focused on improving its food division with a plan to broaden its product range.
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Speaking at the UK retailer’s investor day John Dixon, executive director of food, told analysts that the group is aiming to better ranges in store, while targeting more profitable promotions.
“We are focused on giving customers an innovative feast of products,” Dixon said. “We are targeting 25% growth in our total SKU range beginning this year. Most of this will be entire ranges so they can be delivered with authority in store. We will also be broadening food offer to cover all regular food shopping needs of customers. This will not be a one-stop shop but cover weekly shopping needs of customers.”
The upmarket UK retailer was addressing analysts as it sought to outline how it would take its food business forward after a tumultuous 18 months.
Last month, M&S revealed that sales in its food division had become “positive” for the first time in eight quarters thanks, it said, to sustained investment in promotions.
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By GlobalDataDixon added that M&S would be looking to add 800 to 1,000 new SKUs over next 18 months, as well as increasing the space to account for the new products.
“We will deliver this growth by ensuring M&S as leading quality retailer. We lead on best quality, innovation and we lead on trusted and safe,” Dixon said.
However, he added: “We have room for improvement in providing first-class service, our product range needs broadening, this in turn will lead to us taking a greater share of their [customer] food wallet. We are good value but somewhere off great value and it is these areas that we are focused on improving.”
Dixon said that wellness and health represents a substantial chunk of the food market.
“This is a significant part of our business. We are currently pioneering some science and recipes which we will launch next year.”
The M&S executive went on to say that the company was also focused on its ready meals division, which, faced with “increasing levels of competition”, is an area the retailer is committed to in order to keep ahead of its competitors.
“We believe we have now got our food business back on track with better innovation and better shelf availability, we can be positive about growth opportunities for the medium and long term.”
Dixon also touched on the group’s plans to roll-out its branded goods items to more stores across the UK following a trial of around 400 products in the North East and South East in the last year.
The company said it was primarily focused on areas where it has low share.
“We have created a range and space team to explore this opportunity. New systems should be operational by March 2011,” Dixon said.
Shares in M&S, which also said today that it was eyeing further international growth, closed down almost 4.3% at 346.9p.
