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M&S under pressure to slash prices to revive food business as it plans to open new superstores

Daily Mail logo Daily Mail 17/03/2019 Hannah Uttley For The Daily Mail
An M&S carrier bag bought in a store in Cheltenham.   (Photo by Barry Batchelor - PA Images/PA Images via Getty Images) © PA Images An M&S carrier bag bought in a store in Cheltenham. (Photo by Barry Batchelor - PA Images/PA Images via Getty Images)

Marks & Spencer is under mounting pressure to slash prices in order to stop the rot in its food business.

The High Street stalwart plans to open new superstores to try and bring families in for the big weekly grocery shop – pitting M&S against the likes of Sainsbury’s and Tesco.

It will also start selling its food online for the first time next year after it bagged a £1.5billion deal with online food delivery company Ocado.

a man standing in front of a store: Headache: M&S has to slash prices in order to stop the rot in its food business, experts say © Provided by Associated Newspapers Limited Headache: M&S has to slash prices in order to stop the rot in its food business, experts say

The tie-up has been hailed by chief executive Steve Rowe as the retailer’s ‘biggest and boldest’ move to date, as it desperately scrambles to reverse falling sales.

The retailer is battling against the unstoppable rise of discounters Aldi and Lidl and experts have warned that unless M&S dramatically reduces prices, its food division will continue to struggle.

Richard Chamberlain, an analyst at RBC Capital Markets, said: ‘Prices across the board are going to have to come down.

‘If you look at their pricing I think they are more expensive than Waitrose on branded and own-branded products.’

© Reuters

In a recent survey of 50 products sold by Marks & Spencer and Waitrose, M&S came out ten per cent more expensive – although the company claims it is actually cheaper.

But others believe price reductions could take the company into unfamiliar territory and reduce quality.

Richard Hyman, an independent retail analyst, said: ‘M&S food sets out to be the highest quality among its main rivals. Broadly speaking, it achieves this. Consumers are not stupid. They understand totally that hierarchies of quality are mirrored in price. This applies to everything else in their lives, so why shouldn’t it in food purchasing?

‘M&S food is qualitatively better than anyone else’s in the market. Its prices should be higher.’

People walk past a branch of British clothing and food store Marks and Spencer in London © ASSOCIATED PRESS People walk past a branch of British clothing and food store Marks and Spencer in London

Stuart Machin, managing director of M&S Food, has already begun cutting prices across M&S’s range and is trying to get more families to shop at its stores. His latest plan will see new bigger stores of up to 15,000 square feet showcase the company’s full range of 6,500 products.

Areas devoted to clothing will be reorganised to sell food as the company tries to shake off its image as a food shop for singles and couples, office workers and the elderly.

M&S declined to comment.

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