M&S Aims to Challenge Big Supermarkets in Grocery Market Share.

Marks & Spencer aims to become a "shopping-list retailer" and challenge big supermarkets. The company controls 3.8% of the grocery market and is undergoing a reset after a cyber-attack. Rivals may not be alarmed yet, but M&S' resolve to "come back stronger" is a warning for investors to review High Street holdings. As cost-of-living pressures continue, backing food companies can be seen as a defensive strategy. Tesco, Sainsbury's, and M&S are facing off against private equity owned groups Asda and Morrisons and German discounters Aldi and Lidl. Tesco has emphasized its "financial firepower" and readiness to see profits fall to maintain its position.

Marks & Spencer (M&S) is undergoing a strategic shift to become a "shopping-list retailer," aiming to challenge the dominance of big supermarkets. The company, which controls 3.8% of the grocery market, is recovering from a cyber-attack that disrupted its online operations and left store shelves empty [2]. As M&S seeks to regain its footing, the company is focusing on increasing basket spend by appealing to family shoppers through larger pack sizes and new product ranges [1].

M&S's Bigger Pack, Better Value range has been expanded by a third, with over 100 lines now available in larger formats. New additions include 12 free-range British eggs for £3.20, 600ml of Double Cream for £2.65, and a four-pack of avocados for £3.50. Additionally, 40 new and upgraded lines, including a first own-label medicine range, have been launched. This range includes essentials such as paracetamol, ibuprofen, allergy tablets, and children's liquid paracetamol [1].

The company's strategy appears to be paying off. Latest Kantar data showed M&S grocery sales maintained double-digit growth in the 12 weeks to 15 June, climbing by 12% year on year, despite availability issues caused by the cyberattack in April [1]. M&S's volume and value growth for families was the strongest of any major retailer, demonstrating the effectiveness of its family-focused approach.

M&S's Fresh Market Specials, such as Family blueberry and cherry pots, have also proved popular. The blueberries pots, available in March for £4.50, helped boost year-on-year volume sales growth of blueberries by more than 30%. The cherry pots, available in June for £3.50, became the best-selling Fresh Market Special ever [1].

As cost-of-living pressures continue, backing food companies can be seen as a defensive strategy. Tesco, Sainsbury's, and M&S are facing off against private equity-owned groups Asda and Morrisons and German discounters Aldi and Lidl. Tesco has emphasized its "financial firepower" and readiness to see profits fall to maintain its position [4].

The influx of middle- and higher-income consumers to value retailers is a trend that retailers are hoping to capitalize on. Amazon, for example, is expanding its premium offerings in categories like beauty, while Walmart has seen a surge in higher-income shoppers buying both essential goods and premium products [3]. M&S's focus on family shoppers and value retail could position it to benefit from this trend.

Investors should closely watch M&S's progress as it seeks to become a "shopping-list retailer." The company's resolve to "come back stronger" is a warning for investors to review their High Street holdings. As M&S continues to expand its family-focused range and improve its appeal to value-conscious consumers, it could emerge as a significant player in the grocery market.

References:
[1] https://www.thegrocer.co.uk/news/mands-luring-family-shoppers-with-bigger-packs-and-new-ranges/706580.article
[2] https://www.barchart.com/story/news/33326419/uk-arrests-four-people-over-cyber-attacks-on-marks-spencer-co-op-and-harrods
[3] https://www.empower.com/the-currency/money/value-retailers-higher-income-shopper-news
[4] https://www.premiumbeautynews.com/en/us-beauty-retail-giant-ulta-snaps,26038