M&S Gears Up for Waitrose war
November 2009
As top end of the supermarket chains a price war is breaking out. Marks & Spencer is all set to announce its introduction of branded food at all its stores in an endeavour to seal the gap with Waitrose.
The decision was taken in the wake of a drop of £12.8 million in profits for the first six months as compared to last year.
Waitrose, which is the arch rival of M&S, took a lead with the introduction of a value range in order to attract penny-wise shoppers. In its attempt to catch up, M&S has come out with “Wise Buys” which are cheaper than Essential Waitrose.
With the exception of franchised travel stores it is planning to sell branded products to all its stores in Britain.
“Our trials have shown us that an edited selection of branded grocery and household products has a place at Marks & Spencer. Our customers are at the heart of this decision — they lead increasingly busy lives, so buying those essential, must-have branded products at M&S will help to save them time.”, quoted Sir Stuart Rose, the M&S executive chairman.
This practical measure might aid John Dixon, executive director of food, to qualify as chief executives succeeding Sir Stuart. Sir Stuart will move on to become a non-executive chairman.
Mr Dixon cited Marmite, made by Unilever, and Nestlé’s Kit Kat as examples of goods impossible to duplicate. He further added: “My team and I are focused on delivering the best that M&S Food can offer — innovative products that provide unbeatable quality and great value. But there are some products that we could simply never compete with.”Other branded goods that M&S will stock include PG Tips tea bags and Jameson Irish whiskey.
Booker, a wholesaler run by Charles Wilson, a former M&S lieutenant of Sir Stuart entered a deal to supply the branded goods, during the trial.
Greg Lawless, retail analyst at Collins Stuart, stated: “If they want to be a convenience store, they have to do it. Overall, I’m still of the view that it isn’t the answer and I’m yet to be convinced of the economics.”
Waitrose is joining hands with M&S in the convenience sector through a tie-up with Boots UK and with a strategy to open up to 300 stores. The boss of M&S seemed to mellow down the threat by hinting that M&S is planning to adopt a far more aggressive and effective policy. He was quoted as saying: “If they [Waitrose] want to move into the convenience market, that’s their business, but M&S has got plenty of bullets left to fire,”
According to M&S’s spokeswoman, the company launched its first high-profile price comparison advertisement under the headline, Price checked against Waitrose Essentials. Quality checked by M&S”
Michelle Williams from Artemis Solutions Group who specialise in recruiting for Food and Beverage sector states, “The price war between Marks & Spencers and Waitrose has begun as a reaction to drop in profits. The beneficiary of course will be the consumer”
