For all the undoubted effort Marks & Spencer has put into becoming the ‘ethical retailer’ through campaigns such as Plan A, today’s announcement from Northern Foods reminds everyone that the overriding priority for companies is profit and loss.

M&S is embarking on a radical overhaul of its food business as it expands this side of its empire. Last year M&S was opening two Simply Food stores a week and it is poised to bring in branded goods such as Heinz for the first time.

M&S has to be as tough as the leading supermarkets on price and has been asking suppliers to do their bit to help.

While Northern Foods has refused to comment, price was undoubtedly a major sticking point in discussions over the future of the Fenland facility that will now lay idle for up two years.

The key is that Northern Foods has decided enough is enough. M&S wanted Northern to keep Fenland open to supply some products, including its best-selling lasagne.

Northern decided that it would rather wait, mothball a facility that has been breaking-even at best in recent years and see what else comes along.

Stefan Barden, Northern Foods’ chief executive, has been talking about getting much tougher with retailers ever since taking over the top job a year ago. He has proved his point and it will be interesting to see if any other suppliers entering discussions over the coming months feel emboldened by his approach.

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