Marks and Spencer will open a lower number of Simply Food shops after the food sales in the stores did poorly in the first half of the financial year.
In the past fiscal year, Marks and Spencer’s CEO, Steve Rowe stated that the company hoped to open 200 Simply Food shops over the next five years. However, the company has reconsidered its position and recently stated that it was “slowing” its Simply Food store opening plan.
The company stated that it was facing stiff competition in the sector. It added that consumers were more aware of product values and were being very “careful” where “premium choices” were concerned.
Marks and Spencer added that the company was facing “stronger headwinds” since other food businesses had “encroached” on some of the company’s space.
Reports state that like-for-like food sales, fell 0.1%. The number was calculated after excluding the company’s new store trade.
Commenting on the store’s performance, a research director at GlobalData Retail, Patrick O’Brien stated that the company had put up a “pretty bad performance”. He added that food had always been a “banker” for the company in the past, and its loss in the sector seemed could prove to be “damaging”.
However, surprisingly enough, total food sales for the period seem have to rise by almost 4.4%. Sources believe that sales were most likely driven by new shop openings.
The company originally planned to unveil 90 new Simply Food shops this year. Half of these would be opened by the company itself, while the remainder would be operated by its franchisees.
However, in light of the stores’ poor performance, the company now plans to open 80 stores, equally divided between Marks and Spencer and its partners.
The company also had a further 90 stores planned for 2018, however, that number is now likely to decrease.