By Nicole Parker-Hodds

August 2012

A Service

Associate Analyst

Marks & SpencerCan its new store design turn

around its fortunes?

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Contents

1. Background

2. M&S Bank

3. Clothing

4. Food

5. Beauty

6. Home

7. Footwear

8. Multi-channel

9. Conclusions

All data correct at time of publishing.

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M&S has failed to be in the space race because the majority of its estate is variety stores, which are hard to expand due to the space required.

M&S has suffered from an overly complicated womenswear collection, that confuses customers and makes for a disorderly store journey – a key area the company needs to address.

Although the food department has performed well, it has been reliant on its ready meals – M&S needed to broaden its range to allow customers to do more of their weekly shop at the stores.

Since the successful trial of the new food hall design in November 2011 it has been rolling the concepts out across its stores.

The company is hoping this new store design can help it turn its fortunes around in the UK.

The roll-out of the new store design comes as Marks & Spencer reported its worst financial figures in three years, with profits falling to GBP489.6 million (USD774.8 million).

Planet Retail’s take

Because the company is not in the space race Marks & Spencer will look to its store overhauls to improve sales.

Because the UK currently accounts for 89% of its sales, the store designs are a vital move for M&S.

Background1

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Planet Retail visited Marks & Spencer’s Marble Arch flagship store to analyse the improved offering and customer experience. The new store concept covers all departments within the Marks & Spencer store.

The Marble Arch shop now has 170,000 square feet of selling space, after the new design increased this space by 4,800 square feet.

Marks & Spencer (M&S) will spend GBP500 million rolling out the store concept – GBP100 million less than originally planned.

The new concept was designed to make stores more inviting and easier to navigate for customers, with clearer signage and a bigger selling space.

Phase one of the redesign (which was part of the trial) focused on the food hall and clothing sections.

Phase two (recently introduced) looks to redesign the beauty, footwear and home departments.

The Marble Arch outlet also includes the company’s first M&S Bank branch.

Background1

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On trend with grocery retailers diversifying away from their core offering, Marks & Spencer has launched its own banking service. The Marble Arch store boasts the first of 50 planned branches it hopes to open by mid-2013.

Planet Retail’s take

Marks & Spencer needs to utilise its strong brand and customer trust for this venture.

Marks & Spencer are nicely positioned to take advantage of the prolonged recession weakening consumers’ trust in banks and the financial sector.

Because Marks & Spencer struggles in the space race, financial services - which are easier to roll out and grow - will help Marks & Spencer compete more successfully in a market where other retailers are diversifying their offers e.g. Sainsbury’s entering the music download sector.

M&S Bank, through a partnership with HSBC, is an extension of the company’s M&S Money, but now includes current accounts and mortgages.

The service is designed to offer convenience to customers. The bank branches will be located within existing Marks & Spencer stores and will operate the same working hours, including evenings and weekends.

Self-service banking points and private meeting areas will be available, alongside the existing bureau de change kiosks, and will be supported by 24-hour online banking and a UK-based call centre.

This service will be managed by a dedicated M&S Bank team.

M&S Bank

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