Rebecca O’Connor
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Marks & Spencer sparked protests on the streets of London at the start of the decade when it abandoned its stores in countries including Belgium and France — but as a new decade beckons, it is looking toward the Continent again.
The retailer is understood to have enlisted advisers to identify possible locations in Western Europe for its Simply Food outlets, which sell snacks, fresh fruit and vegetables and flowers.
It is already opening a franchised M&S in Marbella this month selling everything from clothes to biscuits — but not food — to the expat community, amid speculation that other such stores, attracting local consumers, may follow across Spain.
People familiar with the company’s plans said that a version of its Simply Food concept for the Continent was another option that M&S might pursue, although a spokesman for the retailer emphasised that it was still “early days” for the overseas expansion strategy and, while the company was looking at Western Europe, it had not finalised its plans.
Last month, Clem Constantine, M&S’s international director, said that Western Europe was “definitely worth a look again” — a marked contrast to the start of the decade, when M&S closed its last store on the Continent to concentrate on its home market.
According to Nick Bubb, a retail analyst at Pali Capital: “It is well known that M&S regrets that all the stores in France etc were sold off by the previous management, so this would be a way of getting back into Europe. But how a big a market there is beyond the expats and tourists in Paris is not certain.”
Greg Lawless, a Collins Stewart analyst, said: “If M&S was to do this, it would need a joint-venture partner or else the logistics of daily deliveries would not work. They could probably manage daily deliveries to Paris, but not much further. It would need to be a carefully articulated strategy.”
M&S is also looking beyond Europe: in September it began a trial of its food-to-go range in Hong Kong, selling chilled sandwiches and snacks, as part of its attempt to gain market share in China and India. It said that it would accelerate international expansion as part of its Project 2020 strategic review, designed to make it less exposed to the business cycle.
Over-dependence on British consumer spending has been identified as an area of weakness. A company profile by Global Markets Direct, the analyst, said: “The company is highly dependent on the UK retailing operations, which has made it vulnerable to the risk associated with the UK market. High dependence on this market makes the company sensitive to the demand dynamics of this region and limits the income growth of the company to growth potential of the economy.”
Moreover, there are pressures on the home front. The possible move comes as M&S, which has 347 Simply Food stores in the UK, steels itself for new competition from Waitrose, which plans to open 300 convenience shops that would compete directly with the Simply Food brand.
M&S said: “There are opportunities that are worth a look at in Western Europe, however, we don’t currently have any plans for the region.”
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