Marks and Spencer will slow its Simply Food store opening programme due to “headwinds” of intensified competition from other convenience retailers.
The premium retailer revealed the news as part of its financial report for the half year and 26 weeks to 30 September 2017. During the period, the M&S food business saw revenue grow by 4.4 per cent, while overall group revenue grew by 2.6 per cent and profit before tax fell by 5.3 per cent.
Growth in food was driven by new stores, but chief executive Steve Rowe said the business has recognised it faces stronger headwinds in this division that will be addressed in the year ahead.
According to the retailer, hard-pressed consumers are more aware of value and are “careful about premium choices”. “Therefore, although our investment returns remain high, we are slowing our Simply Food opening programme as we reposition our food offer for future growth. Only the highest returning sites will qualify for addition to our store portfolio,” a statement said.
“We have already sharpened prices in core categories and will be taking further steps to bring out value in our ranges. We will increase the pace of relevant innovation, step change our availability and ranging, and continue to develop our Foodhall proposition.”
“The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment.”
During the period, M&S said it has invested in store service and hired 3,000 members of staff, while at head office it has made a reduction of 500 roles.