M&S announces significant price reductions in international stores to enhance global competitiveness and spur growth.
- CEO Stuart Machin reveals plans to rectify price discrepancies in overseas outlets, citing competitiveness issues.
- A Singapore store is notably one-third more expensive than local rivals, prompting a price strategy reevaluation.
- International pricing is high due to dual profit margins between M&S and franchise partners, necessitating renegotiation.
- Plans include trying new products abroad and improving stock logistics to accelerate distribution.
M&S is taking decisive steps to reduce prices in its overseas markets, driven by the need to align its pricing more closely with local competitors. CEO Stuart Machin has highlighted a critical need to address the pricing imbalance that places its international stores at a disadvantage. One stark example is a Singapore outlet, which costs consumers a third more than other local stores, a gap that M&S intends to close.
Machin explains that current international pricing structures result from an arrangement where both M&S and its franchise partners earn a margin on sales, leading to inflated prices. Recognising that such arrangements hinder competitiveness, Machin voices the need for reevaluating these partnerships. “There is no win-win partnership with our franchise partners,” he states, advocating for new agreements that better balance risks and returns.
The current franchise agreements have inadvertently led to a lack of variety in international stores, as partners tend to stock safe, bestselling products year after year to minimise risk. This approach has resulted in a monotonous product offering that fails to stimulate consumer interest.
To counteract these issues, M&S is considering an overhaul of its international strategy, including experimenting with new product lines in its global stores and refining its supply chain logistics. By accelerating how quickly products reach overseas markets, M&S aims to refresh its inventory more dynamically, providing customers with a varied and engaging shopping experience.
Currently operating 434 international stores, with 264 under franchise agreements across regions such as Asia, the Middle East, and Europe, M&S has already made internal adjustments to support these changes. The elevation of Mark Lemming to Managing Director of International signals a dedicated focus on reinvigorating the brand’s global presence.
M&S’s strategic price revisions and operational adjustments underscore its commitment to revitalising its international business.
