Sharp fears over M&S branded foods trial

Sharp, who masterminded the retailer’s groundbreaking “Not just food…” campaign, feared that the introduction of brands would dilute M&S’s own-label proposition and associated reputation for superior quality, a source close to the situation said.

The retailer is testing 350 branded products – including chief executive Sir Stuart Rose’s favourite, Tabasco sauce – in 19 stores in the Northeast so that customers can do more of their standard food shop at the store. Products are being supplied by Booker, the wholesaler run by Rose’s former M&S lieutenant, Charles Wilson.

There is no suggestion that Sharp has not given the trial his full backing since the decision to proceed, but his alleged reservations are indicative of the debate within M&S about the direction of the food division. Underperformance at the business precipitated the replacement in July of food supremo Steve Esom with John Dixon.

An M&S spokeswoman rejected the suggestion that Sharp had opposed the introduction of branded food lines and said the initiative had the “unanimous and collegiate” board support.

Analysts disagree about the merits of M&S’s brands trial. JP Morgan’s Richard Chamberlain noted: “Although this is a logical step to avoid losing customers to rivals, this initiative is likely to reduce M&S’s point of differentiation and put downwards pressure on the food margin.
“On balance, we would have preferred M&S to widen its range of own-brand products.”

Blue Oar analyst Greg Lawless, who visited stores participating in the branded food trial, said: “Overall, we were encouraged that M&S has put a credible range together in-store and executed it pretty well. It remains to be seen if consumers want to buy their branded groceries from M&S.”
> There has been renewed speculation that George Davies, the founder of M&S fashion label Per Una, will cut ties with M&S next month. Davies is said to be interested in investing in Italian fashion business Lovesexmoney.