Saturday 3 August 2019 The Guardian •Financial^37
SupermarketsM&S food stores
Why Percy Pig is
secret weapon
in new-look chain
The revamped
Marks & Spencer
at Hempstead
Valley, near
Gillingham,
Kent, refl ects the
company’s trial
of larger food
stores selling its
entire range of
6,000 products
PHOTOGRAPH:
MARTIN GODWIN/
THE GUARDIANSarah ButlerM
arks & Spencer
is fi ghting back
after two years of
falling food sales
with larger stores,
lower prices and
family-sized food packs. And giant,
oinking Percy Pigs.
At a revamped store in Hempstead
Valley, Kent, the retailer ’s new food
boss says “even more fun” will be
just as important as better food
ranges – hence the larger-than-life
version of its best-selling novelty
sweet in the food aisles.
Stuart Machin says M&S is trying
to make headway in the ultra-tight
grocery market by loosening up and
drawing in more family shoppers.
As well as the giant Percy there is
a plastic chicken that clucks at the
press of a button and a neon sign
urging shoppers to “use your loaf ”.
“We take our food seriously
but we don’t take ourselves too
seriously,” he says.
The company is also trying out
larger stores where M&S’s full range
of more than 6,000 products will be
available, with Hempstead one of
the fi rst. At present the group has
only a dozen sites where all of those
items are on off er. Most stock about
2,000 items, which pales besides the
25,000 items per store that major
supermarkets typical ly off er.
Family appeal will be an
important part of M&S’s attempt to
sell food online through a £750m
joint venture with the delivery
specialist Ocado which will kick off
in September 2020.
If that is a success, it could hand
M&S an additional 1% share of thegrocery market according to analysts
at stockbroker Liberum. This could
put it on a par with – or even above- Waitrose, which is being ousted by
Ocado as its food partner.
That would be a huge jump for
M&S, which currently controls
just 3.2% of the UK grocery market
according to analysts at Nielsen - putting it behind Aldi and Lidl,
as well as major supermarkets
including Tesco and Sainsbury’s.
At Hempstead Valley, M&S is
taking back clothing space in order
to double the size of its food hall to
nearly 17,000sq ft. It is widening
aisles so trollies can be used more
easily and adding more fresh
produce and fresh bakery goods, as
well as additional store cupboard
basics from washing up liquid to
frozen vegetables and even some
popular brands.
Family-sized packs make up 20%
of the store’s range in Hempstead
Valley, compared with about 2% in
most M&S food halls.
“We want to be more than just
special occasions and a fresh ready
meal. Where we have stores which
are bigger they actually perform
well, there are just too few of
them,” Machin says. The aim is to
have a store “with the mind of a
supermarket and the soul of a fresh
market”, he adds.
At least two more larger food
stores will open before Christmas;
some new food sites could be as big
as 25,000sq ft. M&S is planning a net
50 new standalone food stores over
the next three to fi ve years, although
not all of these will be larger outlets.
M&S has more than 1,000 food
stores, of which 300 are in full-range
sites that also sell clothing.
Machin, a veteran of Sainsbury’s,
Tesco, Asda and Coles in Australia,
was tasked with reinventing M&S’s
food business when he joined
in April 2018. The company’s
chairman, Archie Norman, said
the chain was losing ground to
competitors because it was too
slow to innovate, too expensive and
weighed down by excessive waste.
In the past year, M&S has cut back
short-term promotions but reduced
prices on more than 400 of the most
popular lines such as beef mince and
bread. For instance, a basic loaf of
bread is now 75p, down from £1.15.
A concerted eff ort is being made to
modernise an ageing supply chain
to reduce waste and speed up the
introduction of new food ranges.
But can these tweaks really make
a diff erence in persuading families
to switch from major supermarkets?
Machin says the chain is already
several percentage points cheaper
than Waitrose and has better quality
food than its bigger rivals and more
focus on the ethical credentials of its
suppliers.
Highlighting those ethical
standards with sustainability eff orts,
including cutting back on plastic
use, will be part of the fi ghtback.
At Hempstead Valley, for example,
M&S is testing cardboard containers
for mushrooms and tomatoes and
removing plastic bags from bread
baked in store. The amount of loose
produce on off er has increased 40%.
Having worked in Hempstead
Valley’s Sainsbury’s as a schoolboy
and returned to manage the store in
his 20s as a graduate trainee, Machin
is well aware that M&S is surrounded
by competitors there, including
a large Tesco, a Lidl, an Aldi, a
Sainsbury’s and a Morrisons.
In its second week of operation,
the revamped store has persuaded
new shoppers to fi ll trollies rather
than baskets. Machin sees “greenshoots” across the chain as it
increas es the amount of goods sold.
Bryan Roberts, global insights
director at the research fi rm TCC
Global, says: “No matter what
you throw at M&S or Waitrose it
doesn’t make you bulletproof to the
advances of Aldi and Lidl and the
on going discount threat.”
He says M&S’s proud history of
innovation and even its reputation
for luxury food ha s been diluted as
rivals have caught up. “There is no
shortage of places to go for quality
convenience foods,” Roberts says.‘We want to be more
than just special
occasions and a fresh
ready meal. Where
we have bigger stores,
they perform well’Stuart Machin
M&S head of foodSource: Nielsen. 12 weeks to 13 July 2019M&S is 9th in UK grocery marketTesco 26.5% of sales
Sainsbury's 14.2%
Asda 13.5%Aldi 9.6%
Morrisons 9.5%Lidl 6.6%
Co-op 5.2%
Waitrose 4.1%Marks & Spencer 3.2%
Iceland 2.3%0% 5 10 15 20 25▲ Smiles in the aisles: Percy Pig is
expected to bring more fun and more
familes into stores, while a bigg er
range of fresh produce will be on off er
PHOTOGRAPH: MARTIN GODWIN/THE GUARDIAN50
75 p
The number of
new food stores
Marks & Spencer
says it plans
to open in the
next three to
fi ve yearsPrice of a basic
loaf of bread- down from
£1.15 – as the
chain’s food
bosses target
budget-conscious
families
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