Marks & Spencer to test online food service
M&S planned to ease itself into the market with a “soft trial” in the autumn.
But ceo Steve Rowe detected no strong demand for online food deliveries from the retailer’s customers at present.
‘Ready with the right response’
“Our customers haven’t moved yet, but they will and we need to ensure that we are ready with the right response.
“There are unanswered questions over what this means for M&S and we have a team looking at this now with a view to undertaking a soft trial in the autumn.”
Rowe said that the company would not rush into making a decision on what kind of online offering it would make available to its customers. He pledged to review the retailer’s online food offer carefully.
“The economics of food online are not straightforward and it is not something that we are going to rush into until we have substantial customer insight and a better understanding of what is right for M&S and right for our customers.”
He also argued that the retailer’s business had not suffered in recent years for the lack of an online offer.
“It has not cost us anything over the last five years by not being online with food,” said Rowe.
‘Right for our customers’
M&S currently offers a small range of party food and alcohol for consumers to order through its website. The move will be the first time its wider grocery offering would be available online.
The retailer stocks about 7,000 food products, compared with the 40,000 stocked by Tesco stores. However, a majority of M&S’s products are own-label, with a limited number of household brands.
M&S planned to open 200 new Simply Food stores by the end of 2019 and downsize its Clothing & Home division, following a 4% boost to food sales in its half year results in October.
What the analyst said
Commenting on M&S’s decision to enter the online food shopping market, Martin Lane of Money.co.uk said: “M&S is trying to keep up with the big boys here and cash in on the success of their memorable food adverts and grocery delivery services as a whole.
“More competition in the online space means a fight for the crown of customer service king and fiercer price wars – great for shoppers but expensive to maintain for the brand.
“It’ll be interesting to see how it goes down, M&S has built its reputation on quality food and is renowned for small shopping baskets. Up against the likes of Ocado and Amazon fresh, they need to make sure they offer something unique to tempt their customers online.”
