Marks & Spencer will cut food prices

Eurofood, Nov 19, 1998

Perennial UK retail favourite Marks & Spencer has announced that it will slash food prices in a bid to claim vital Christmas shopping expenditure and recover from disappointing interims. Traditionally spared the worst effects of economic slumps and reduced consumer spending, M&S saw overall pre-tax profits take a 23% nosedive to just 348m [pounds sterling] (ECU490m), with food sales showing worrying declines in the second quarter.

The group hopes to build on the success of its Early Bird promotion, which offers discounts on Christmas lines, and is looking at ways of increasing consumer spend in all areas. Barbara Wilmot of analysts Taylor Nelson Sofres told Supermarketing magazine that "increasing adherence to ... loyalty cards means that shoppers are decreasing the number of different stores they use." She added that M&S had lost around a quarter of a million shopping homes since last year, although faithful M&S customers have increased the frequency of their sorties to its food hall and are spending slightly more once there. It remains to be seen what share of the Christmas spendfest M&S can claim for its shopping baskets.