Taste of Tomorrow

M&S has again been the topic of discussion within the retail industry, and for once, the conversation has been more generally positive in recognising ‘green shoots’ of progress in one part of its business at least – M&S Food.

When Marks & Spencer announced that it would close 110 of its stores by 2022 as part of a radical restructuring plan it was met with a dismayed but weary acceptance by many. This plan would involve the ‘reshaping’ of its retail estate and see some older, smaller format, combined general merchandise and food stores to either close completely, or to be reconfigured as Food only shops.

As a business, Marks and Spencer has been languishing in the retail doldrums for some time, with the decline in its fortunes affecting its general merchandise divisions most notably. Lately, in a series of worrying trading updates, its Food business – for a long time the one part of the business that’s demonstrated sustained growth – appeared to begin to stall. Indeed, for a long time, M&S Food had been the one part of the business they could point to demonstrate considerable, sustained success, and an area that kept shareholders onside.

In recent years the UK grocery market has seen considerable change and remains one of the most fiercely competitive retail markets worldwide. The well reported recent growth of the German Discounters have mounted an unprecedented, and for now seemingly unabated attack for the nation’s food shopping, and taken sales and big swathes of market share from the established grocery sector players.

Aldi has recently announced plans to open a new UK supermarket everyday for the next two years in a further push for dominance. This will no doubt force the UK’s established grocery retailers to look even deeper into their own propositions and make changes that will help them to, in effect, compete harder against the likes of Aldi and Lidl, while also continuing to jostle along together.

Add to that how online grocery shopping has penetrated and become quickly established in the UK, and its no wonder that all grocers are anything but complacent to challenges facing their businesses. M&S will itself enter the online grocery market with its new partnership with Ocado paying ￡750m for a 50% share of the new Ocado.com joint-venture, which will begin trading when the existing Ocado deal to supply Waitrose products expires. With the mega merger slated between ASDA and Sainsbury’s finally blocked in the spring of 2019 by CMA, a big grocery sector casualty seems all but inevitable at some point in the not too distant future. The market cannot sustain all indefinitely. M&S will surely have high hopes that its latest revised store format and Ocado tie-up will help it take a bigger slice of the grocery market as we head towards a new decade.

“…M&S has never been comfortable in taking big risks with its proposition…”

Part of its new food strategy has seen M&S draft in new leadership to spearhead change and stimulate fresh action, with much-respected former Sainsbury’s CEO Justin King joining the business along with Stuart Machin from Australia’s number two grocer Coles. As a company, M&S has never been comfortable in taking big risks with its proposition, typically applying selective ‘nips and tucks’ to its instore strategy. With renewed leadership firepower at play, however, that appears to be changing as it undergoes a somewhat radical shakeup of its proposition and instore formula.

The success of its Instore Bakery Team at the recent Baking Industry Awards, where M&S scooped the coveted title of ‘Best Supermarket Bakery’ is further evidence of ‘transformational progress’. When I met the M&S Instore Bakery (ISB) team at its Newcastle store during the judging process, it was evident that everyone involved within this category was highly focused, motivated and working at pace to deliver positive change, as the Food business appears to be as a whole under the current leadership team. (Read more here) 

So what has M&S been up to in with its new concept food stores? And why change what for a long time has been a winning formula? Especially, as the old adage says, “if it ain’t broke…” may well apply here.

In what it hopes will be a new chapter of success, M&S is on a mission to try and get more of the family shop and broaden the appeal of its food offer – championing its ‘foodie’ and service credentials while underpinning a new drive to everyday value that’s more accessible to all. Change is in the air. M&S no longer sees its food business as specialist, for treating, for special occasions – but for families and the everyday. Getting a bigger share of the ‘everyday quality’ grocery shop, both instore and online is firmly the direction of travel for M&S.

…the rallying cry seems to have been ‘to go bigger, bolder and louder’…”

In recent weeks, two ‘new generation’ stores have broken cover. The first, the reopening its previous Hempstead Valley branch, was quickly followed by its Clapham Junction branch in Battersea, which reopened to great fanfare (complete with instore DJ). After attending both openings, it’s easy to see how many of the ideas initially launched within the Hempstead Valley store have been further amplified in Clapham – the rallying cry seems to have been ‘to go bigger, bolder and louder’ here.

It is immediately clear that with both product offer and the aesthetic ‘look and feel’ in-store is the extent to which M&S have considered the customer profile for this location. Clapham is an affluent area and one that’s busy with commuters. Those that live here border on hip…but not too hip to shop in M&S. Fittingly, this store seems like a hybrid of M&S and Whole Foods Market that will appeal to customers who want to make ‘the right choices’ when spending their money but want high levels of convenience. The commuter shopper has a huge range of choices with packaged ready meals from the ‘Market Deli’, to the home cooked convenience of fresh meal kits. And if there’s no time or inclination to even put the oven on at home, that’s catered for too.

Overall the look and feel of the store has been updated. A darker colour palette is used instead of the stark white of older M&S food halls. This gives a ‘cosier’ more intense look but the space actually feels much larger. Wider aisles and the addition of lower fixtures at the front of the store maximise the layered ‘arena effect’.

“…nods to street food markets and a more urban feel…”

Large format navigational signage creates an easy shopping experience and gives visibility to the full range on offer. Bold LED category signage nods to street food markets and a more urban feel, although this seems at odds with the look of the rest of the store.

POS is quirky, informal but informative. A relaxed ‘chalkboard’ typeface is used throughout with an unmistakably M&S feel. Generally, there is more POS used across the store. This creates a ‘noisier’ less exclusive atmosphere, but this too is intentional. This is not just M&S POS, but a lot more and bigger, louder and much more shouty M&S POS than you’ve ever seen before.

Other fun features include some that have been used in other ‘mainstream’ supermarkets for years including the opportunity to press a button and hear ‘the chickens clucking’ within the free range egg display. This is an idea that was first imported to UK grocers over 15 years ago from Walmart, then to stable mate (or should that be ‘barnmate’?) ASDA, and has even had a stint in Tesco and Morrisons over the years. Though a little gimmicky, it’s the broader change these types of things signal. Further evidence that M&S is aiming to secure a larger share of the ‘everyday’ quality grocery shop, both instore and online. 

“It’s a great example of future thinking…”

The grocery section has a Whole Foods Market concept feel to it, with more specialist handling. The cheese, deli and bakery counters, (recently closed by Tesco) have become big, differentiating focal points within the new M&S. Service, theatre and choice as the key point of difference.

There is also marked move towards showcasing sustainability and environmental solutions. One of the biggest publicity coups for M&S with this opening was the partnership it has launched with urban farming specialists Infarm from Berlin. I first found this innovative business instore in Dusseldorf within the premium food retailer Zurheide Feine Kost, and it featured within our Grocery Insight report back in September last year. (Download here)

Within artificially lit, hydroponic system greenhouses, herbs are literally grown in front of shoppers. Meanwhile, reduced packaging gives the freshest products possible. It’s a great example of future thinking and represents one of many ‘interactive and sensory’ features M&S is deploying to make its food shops of the future ‘cut through’ the standard fayre.

In all, the new store format is a welcome improvement, albeit one that wasn’t obviously needed. It works very well in this location but will be interesting to see it translated into smaller towns and stores. If they can keep standards high (and there were signs of this slipping already in Clapham, with crates of stock littering the sales floor) then they have a great new formula. Gimmicks aside, the new elements within both the M&S Hempstead Valley and Clapham food stores represent a positive change in the right direction, albeit one that will require deep pockets to rollout the changes more widely across the estate, and at pace.

Click here to see more images of the new M&S Food store in Clapham.