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