M&S’s goal to become the leading omnichannel retailer in the UK is dependent on further investment. The company already has a pipeline of 20 new locations that are bigger and better planned for the 23/24 fiscal year.
M&S made the announcement today that it will be investing close to half a billion dollars (£480 million) in expanding and improving its stores across the UK. The investment made by the retailer will result in the creation of more than 3,400 new jobs all over the country. Additionally, the investment will strive to create a fit for the future M&S store estate as well as a seamless experience for its customers whenever they shop.
M&S highlighted its intention to accelerate what is currently a five year store rotation programme and seek a delivery within three years by 25/26 at its most recent investor day. The programme currently lasts for five years. M&S has already determined a pipeline consisting of 20 new stores that are going to be established in the following fiscal year that are going to be bigger and better. This is part of the company’s programme acceleration.
“Stores are a vital component of M&S’s omni-channel future and serve as a competitive advantage for how people want to purchase today,” said Stuart Machin, chief executive of M&S. We aim to rotate from the 247 stores we currently have to 180 higher quality, higher productivity full line stores that sell our full Clothing, Home, and Food offer while also opening over 100 bigger, better food sites. Our store rotation programme is about making sure we have the right stores, in the right place, with the right space.
The success of our recently moved and renovated businesses gives us the assurance to move through with our plan more quickly. Our investment in stores improves the experience for both customers and employees, supports the local economy by creating new jobs, and enables us to create a more sustainable estate overall.
The new store pipeline for 23/24 includes eight full-line destination stores in prime city sites, including two that will open in summer 2023: a 97k square foot store in Leeds White Rose and a 70k square foot store in Liverpool ONE. Other significant stores will debut later in the year, including a 65k square foot store in Birmingham Bullring (autumn 2023), a 96k square foot store in Manchester’s Trafford Centre, and a 98k square foot store in Lakeside Thurrock, both scheduled to debut in winter 2023.
As part of M&S’ initiative to revitalise currently vacant buildings, all five of the new stores will be relocated to former Debenhams locations. Shoppers can browse in stimulating environments with larger aisles and a clear line of sight because each has been created with consideration for the needs of the neighbourhood families. Fresh market-style food halls that carry the whole M&S Food line, roomy clothing, home, and beauty departments, brand-new M&S cafes, environmentally friendly innovations like Fill Your Own, and free parking all add to the convenience of shopping for consumers.
M&S plans to invest in 12 new food halls in towns and cities around the UK in addition to full-line stores. These include a 16k square foot store opening in Stockport in the summer of 2023, a 12k square foot store opening in Barnsley in the fall of 2023, and a 9,000 square foot store launching in Largs, a beach community in North Ayrshire, about 33 miles from Glasgow, in the winter of 2023.
In addition to its investment in owned stores, M&S intends to increase the convenience of its offer by extending its successful franchise model. As a result, more customers will be able to experience the M&S Food selection, expanding upon the currently flourishing franchise alliances with BP, Moto, SSP, and Costa.
The success of newly relocated establishments inspires confidence in the pace of the programme.
The new and freshly renovated M&S stores have performed better than expected, with sales ahead of schedule:
Clothing and home sales in Colchester increased 26% faster than expected.
Clothing and home sales increased by 35%, while food sales increased by 75% in Lllandudno.
Sales increased by 26% at the M&S Food shop in Oatlands, Harrogate, which has just expanded.
In November, M&S relocated from a dilapidated town centre location in Chesterfield to a new 46,000 square foot store in the nearby Ravenside Retail Park, providing abundant free parking for consumers and bringing 100 new employment to the area. Sales overall increased 103% in December over the prior year. The opening was also viewed by the local council as an expression of “confidence” in the town’s future and as an addition to the plans for the town center’s rehabilitation (see notes to editors for full quote).
The retailer M&S has the confidence to move more quickly after seeing positive results from its recently moved locations, which achieved return on net capital investment in just two years. M&S will experience a reduction in lease liability (£309m) as a result of the shop rotation programme.
The omnichannel shopping experience that shoppers seek is supported by new stores.
A significant investment in new digital offerings to provide clients with an omnichannel solution supports the store rotation programme. This includes the introduction of Scan & Purchase, which allows customers to use their phones to scan and bag food items as they shop, directly from the M&S app, and the roll-out of Digital Click & Receive to 130 locations throughout the UK, enabling consumers to collect their delivery in under 60 seconds.
In M&S’s Christmas trading update, it was revealed that sales through the M&S app increased by 33%, and the number of active app users increased to five million from four million. The M&S App accounted for a third of all online sales during that time period, and customers who purchase with M&S across various channels are 8 times more valuable, highlighting the benefit of a completely omnichannel retail offer.
constructing a sustainable shopping centre in every way
M&S has always taken the lead in sustainability, and in 2021 it refocused its Plan A programme with the sole goal of achieving a net zero business across its whole value chain by 2040 – ten years earlier than the Government’s UK-wide objective. This year, M&S is integrating smart building controls and more energy-efficient LED lighting, as well as investigating other potential for energy generation throughout the estate, such as the installation of solar PVs at a number of promising locations.
Additionally, M&S is assisting consumers in leading more sustainable lives by installing ultra-quick electric vehicle charging stations at about 70 M&S locations in collaboration with BP Pulse.
Rotation by releasing value from older sites
By FY25/26, an estate of 180 Full Line stores and 420 owned food stores is intended to be established through investment in M&S’ rapid store rotation programme. To finance it, M&S will have to relinquish development value from some of its older UK locations. The store rotation programme aims to modernise businesses and produce a shopping experience that today’s consumers seek.
Given that it controls about 40% of its estate, including the Marble Arch location, M&S is in a unique position to realise this value. Read more to learn more about how M&S intends to create a bold, sustainable, and inventive Marble Arch site that is better for employees, clients, communities, and the environment. here
