M&S is initiating significant price reductions in its international stores to enhance growth and competitiveness.
- CEO Stuart Machin highlighted disparities in prices compared to local competitors as a primary concern.
- M&S’s Singapore store prices are notably higher, prompting a need for price adjustments.
- Franchise agreements are being reviewed to shift risk balance and refresh product ranges.
- Plans include testing new products and speeding stock delivery in international markets.
Marks & Spencer (M&S) aims to implement price reductions in overseas markets as part of their strategy to boost international growth. This initiative is spearheaded by CEO Stuart Machin, who identified a key issue with pricing disparities that have positioned M&S at a competitive disadvantage. By aligning their prices more closely with those of local competitors, M&S seeks to restore competitiveness and capture a larger market share.
In a striking example, the CEO noted that one of the M&S stores in Singapore was pricing its products at levels approximately one-third higher than rival retailers. This discrepancy has highlighted the need for a strategic review and adjustment of international pricing policies. Machin acknowledged that such high pricing stems from both M&S and its franchise partners making margins on sales, leading to inflated prices for consumers.
A major component of Machin’s plan involves redefining the terms of franchise agreements. He expressed the importance of creating a more balanced risk-sharing model, as current agreements tend to place more risk on franchise partners, who then opt for a safe, repetitive selection of basic ranges. There is a call for innovation and a change in approach to how products are selected and placed in stores across different regions.
To facilitate these changes, M&S is considering trials of new product lines specifically tailored for international markets. Additionally, the company is working on improving logistical frameworks to expedite the delivery of new stock to stores abroad, thereby enhancing responsiveness to market demands.
Further supporting this international push, M&S has appointed Mark Lemming, previously their clothing and home supply chain director, as the new managing director of international operations. This move underscores the company’s commitment to revamping its international presence and operational strategies.
These strategic changes by M&S are aimed at repositioning their brand overseas to achieve sustained growth.
