Marks and Spencer's food business will continue to prosper, the UK retailer's chief executive said today (10 July), despite the head of the division being moved to lead its under-pressure non-food arm.
Marc Bolland told just-food the upmarket retailer was confident of further progress from its food division under the direction of Steve Rowe, who will take charge of the unit in October.
Rowe, the company's retail director, will replace John Dixon as executive director for food in a management reshuffle. Dixon will switch to executive director for general merchandise, replacing Kate Bostock, whose depature "by mutual consent" was announced the day M&S reported a drop in clothing sales.
"We are not taking a person from outside who is unknown to the business. We put up somebody who has spent more than 20 years at the business and who manages the food stores at the moment. He is in charge of these food stores, he sees them every day, he talks to staff, he talks to traders, so he's a very natural successor to John and therefore we have all confidence he can take it a step further," Bolland said.
M&S reported a 0.6% increase in like-for-like food sales for the 13 weeks to 30 June, the first quarter of its current financial year. The result followed a year in which sales and margins from M&S's food business increased.
Bolland repeated an insistence made in recent months that the retailer's record of innovation was setting the company apart from its rivals, even if some, like Tesco, are running offers that echo M&S's Dine In promotions.
"We are absolutely ahead of the game. We are doing nearly 2,000 innovations a year, we've done 700 over the period. We are not only ahead of the game but we are in a good rhythm. We have an established organsation, focusing on product development of the type of product you will never find in a supermarket. The innovation we bring through in specialness and health is market leading and would not be found in any other supermarket," Bolland said.
The retailer would not give too much away about the early performance of its Simply M&S range, a line of "competitively" priced "everyday" products, which was launched in May.
CFO Alan Stewart said there had been "a very good response" to the range from customers but declined to comment further.
Stewart was coy about the boost the Jubilee gave to the retailer's sales, instead noting that, in the week leading up to the event, the company "significantly outperformed the market by a factor of more than twice".
Neil Saunders, an analyst at retail analysts Conlumino, said M&S, with its "high quality" products was capitalising on more consumers eating in but he also praised its Simply M&S range, which, he said, "promotes a sense of value".
"Along with constant range innovation, all of the above have helped M&S to ease up market share in food. This is an impressive performance, especially when set against a more muted grocery growth environment and more competition at the quality end as many supermarkets try to cash in on the trade-up-dine-in trend," he said.
