Lower prices key to M&S Ire­land’s food strat­egy

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

he said. “Back in May we re­duced the price of about 200 prod­ucts and we brought down the price of some killer deals and then in Au­gust again we went and looked at about 180 prod­ucts. On av­er­age there has been a 15pc re­duc­tion on those prod­ucts, be­tween 9pc and 19pc and we’re look­ing at do­ing some more.”

At the value end of the mar­ket, M&S is un­der pres­sure from Aldi and Lidl, whose pop­u­lar­ity has forced all re­tail­ers in the Ir­ish mar­ket to con­tem­plate their price po­si­tion­ing. On the other side, higher-value ready meals are feel­ing the squeeze from the likes of De­liv­eroo, with con­sumers able to or­der restau­rant food with ease.

Scully is try­ing to get more and more peo­ple to sam­ple M&S food, lured in by cheaper prices, and con­fi­dent that qual­ity will win them over. “Our cus­tomers should be see­ing more and more of the great value we have even on the ev­ery­day ba­sics. Peo­ple come to us to eat now, eat tonight and for spe­cial oc­ca­sions, they’re the three main shop­ping mis­sions,” he says.

“What we’re say­ing is, ‘Look, we have great value, we re­alise there are cer­tain ar­eas we need to sharpen our prices, which we did but over­all, it’s hav­ing great qual­ity food at a great price’.”

The food busi­ness ac­counts for close to half of the sales in the Ir­ish op­er­a­tion, with cloth­ing and home ac­count­ing for the rest of the rev­enue. This roughly mir­rors the trend in the UK.

De­spite the chal­lenges of the Ir­ish mar­ket M&S does have ex­pan­sion plans for new stores. It is clos­ing 100 stores in the group, but none in Ire­land. In­stead it opened a sub­stan­tial food hall in the Omni Shop­ping Park, Santry in late 2017 and has plans for sev­eral more food stores. It is close to sign­ing a deal for a premises in Lim­er­ick and is also tar­get­ing a lo­ca­tion in Water­ford.

“Hav­ing opened in Omni just shows what our cus­tomers think of us, the value they per­ceive in our store so that has kind of ex­cited us to look around.”

He said that the dif­fi­culty in get­ting sites meant it was dif­fi­cult to quan­tify ex­pan­sion tar­gets. “We want to grow the food busi­ness, we think there’s a great op­por­tu­nity here in Ire­land, we think that Ir­ish cus­tomers love our food so it’s a ques­tion of get­ting the right num­ber of stores and get­ting them as quick as we can.”

“Water­ford is a place that we would look at. Any big pop­u­la­tion cen­tres where we are not at the mo­ment, we would look at try­ing to get in,” he added. In 2013, M&S closed stores in Tal­laght, Dun Laoghaire, Mullingar and Naas. What does the com­pany think of those de­ci­sions now?

“Hind­sight is a won­der­ful thing and we might have done things dif­fer­ently right across the patch if we knew then what we now know,” he said.

Chang­ing con­sumer habits mean that the group strat­egy is to add more food stores while an­tic­i­pat­ing that cloth­ing and home­ware items will in­creas­ingly be sold on­line.

“One has to be aware of how rapidly the mar­ket is chang­ing and how the cloth­ing and home space will change in years to come. I think what you will find is that most re­tail­ers prob­a­bly have fewer big­ger stores.”

Within five years, the group wants a third of the sales of cloth­ing and home to come from on­line. “So, that’s some­thing that we’re con­scious of and I think Ire­land has lagged the UK in terms of how peo­ple shop on­line.”

He said that in­vest­ing in the Ir­ish web­site will be among the com­pany’s plans for 2019.

M&S Ire­land chief Ken Scully is hop­ing cus­tomers will be won over by the qual­ity of food in its stores and is look­ing to grow that side of the busi­ness

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