Marks And Spencer Group Plc · LSE:MKS
Marks And Spencer — Investor Day (October 2009)
134 slides from Marks And Spencer's investor day presentation, Oct 13, 2009
Slide 1: Investor Day 13 October 2009
Mass YOUR Investor Day 13 October 2009
Slide 2: Investor Day - Stuart Rose, Chairman
Investor Day Stuart Rose Chairman
Slide 3: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 4: Project 2020
Mass YOUR Project 2020 lan Dyson
Slide 5: Project 2020
Project 2020 Three key objectives – Increase the pace of change and operational execution – Accelerate towards becoming a multi-channel retailer – Drive our International business
Slide 6: Project 2020: The vision
Project 2020: The vision From cyclical… … to long term sustainable growth Profit, £m
Slide 7: Project 2020
Project 2020 • To create long term sustainable growth • We want to move: From To Product focused Customer focused Store centric Multi-channel UK dominated International • First phase: Laying the foundations
Slide 8: Project 2020: Laying the foundations
Project 2020: Laying the foundations Restructure Implement new Drive operational Supply Chain IT systems execution Deliver operating cost efficiencies Drive sales growth Provide a platform for growth
Slide 9: Restructure supply chain
Restructure supply chain Efficiency Contract renegotiation Fewer trucks Too many trucks Lots of manual Streamlined processes 3PLs paid more processes Minimum 3% savings p.a. as costs rise 3PLs paid on results Product handled twice Product handled once All Product sent Product sent direct 100 sites 4
Slide 10: Implement new IT systems
Implement new IT systems Today Today Strategic Strategic programmes programmes Future Future GM Systems not shown: ECES, Prices from SPM Dublin SPEX, IFG MIS. EUROPEAN & IFG GM WIRING DIAGRAM - Aug 2007 Picking notes Joint Retail Logistics IFG, franchises MARGINS Picking notes, EDI picking SAS recei
Slide 11: Drive operational execution
Drive operational execution
Slide 12: Project 2020: Laying the foundations
Project 2020: Laying the foundations Restructure Implement new Drive operational Supply Chain IT systems execution Deliver operating cost efficiencies Drive sales growth Provide a platform for growth
Slide 13: Supply chain and IT capex and benefits
Supply chain and IT capex and benefits By 2015/16: Total benefit £250m, total capex £1bn* Benefits Capital expenditure * Including £250m pre 2009/10
Slide 14: Project 2020
Project 2020 • To create long term sustainable growth • We want to move: From To Product focused Customer focused Store centric Multi-channel UK dominated International • First phase: Laying the foundations
Slide 15: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 16: Supply Chain and IT - Darrell Stein
Supply Chain and IT Darrell Stein
Slide 17: Summary
Summary 1 Supply Chain & IT operations is a key part of laying the foundations 2 We have already delivered benefits 3 We have a plan and a great team to take us forward
Slide 18: Implement new IT systems
Implement new IT systems Today Today Strategic Strategic programmes programmes Future Future GM Systems not shown: ECES, Prices from SPM Dublin SPEX, IFG MIS. EUROPEAN & IFG GM WIRING DIAGRAM - Aug 2007 Picking notes Joint Retail Logistics IFG, franchises MARGINS Picking notes, EDI picking SAS recei
Slide 19: Delivered to Date
Delivered to Date • Strengthened team • Corporate IT strategy • Lower fixed costs • Projects (examples): – Finance, procurement – Store refresh – International system – Ecommerce Significant benefits already delivered to plan
Slide 20: Key Projects Moving Forward
Key Projects Moving Forward • POS • Business Foundation • HR Systems
Slide 21: POS: Point of Sale
POS: Point of Sale Refresh of Point of Sale & Stock Systems in stores From To • 8 hrs to train staff • 4 hrs • 28 step refund • 4 steps process • Real time • Stock position (better waste & updated overnight stock) Rollout in 10/11
Slide 22: Business Foundation
Business Foundation Standardises the way we work – SAP From To • Inconsistent sales • Better buying with and margin data accurate data • Multiple sources of • ‘Single version of sales and stock data the truth’ • Inconsistent • Controlled promotions promotion management Rollout in 11/12
Slide 23: HR Systems
HR Systems Refresh of HR Systems in store & Head Office From To • Manual processes • Automated processing • MI can take days • Real time decision making • Inaccurate pay • Accurate pay (hours automatically recorded) Rollout in 11/12
Slide 24: IT Summary
IT Summary Complex Simple • Clear plan & resources • Strong return on investment • Efficient processes
Slide 25: Restructure supply chain
Restructure supply chain Efficiency Contract renegotiation Fewer trucks Too many trucks Lots of manual Streamlined processes 3PLs paid more processes Minimum 3% savings p.a. as costs rise 3PLs paid on results £150m p.a. Product handled twice Product handled once All Product sent Product sent direct
Slide 26: Delivered to Date
Delivered to Date • Strengthened Team • Corporate Supply Chain strategy • £30m savings delivered, focused on efficiencies & contracts: – 21 warehouses closed – Renegotiated all contracts – FSV Freight Club – Trialled single tier network – Switched furniture provider
Slide 27: Efficiencies (1)
Efficiencies (1) Loose Loading – Outbound capacity increased 50% Assisted Picking – Pick accuracy doubled
Slide 28: Efficiencies (2)
Efficiencies (2) Increased Productivity by 15%
Slide 29: Contract Renegotiation
Contract Renegotiation • Foods: GIST (£20m pa by 11/12) • GM: (£8m pa by 12/13) – DHL – Wincanton – NDL • Furniture: Wincanton (£5m pa by 10/11) • International: to do 3PL’s now paid by results
Slide 30: GM Warehouse Consolidation
GM Warehouse Consolidation 08/09 5 - 7 yrs
Slide 31: Warehouse Consolidation – next 18 months
Warehouse Consolidation – next 18 months • Close more warehouses • Open Bradford • Start dedicated Ecommerce warehouse in Midlands
Slide 32: International Supply Chain
International Supply Chain • Products sent direct to country of sale • Consolidate international warehouses • Efficiency projects
Slide 33: Summary
Summary 1 Supply Chain & IT operations is a key part of laying the foundations 2 We have already delivered benefits 3 We have a plan and a great team to take us forward
Slide 34: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 35: Multi channel - Steve Rowe
Mass YOUR Multi channel Steve Rowe
Slide 36: M&S Today
M&S Today M&S International 296 Stores M&S UK 668 Stores M&S Direct
Slide 37: By 2020: The biggest shift in shopping habits since self service
By 2020 : The biggest shift in shopping habits since 1970’s ‘self service’… the influence of ‘direct’ • Direct will influence 60% of GM sales and 11% of Food sales • Store-only sales will remain flat • Growth will come through direct/direct to store General Merchandise Food Food & Grocery market 200
Slide 38: Growth opportunity switches from stores to direct-affected sales
Growth opportunity switches from stores to “direct-affected” sales. A multi-channel strategy is the only way to maximise this UK retail splits by channel £344bn £307bn +8.0% £271bn Sales (£bn) +10.7% £57bn £21bn £39bn +8.9% +4.9% £81bn £38bn £64bn £212bn -0.6% +0.2% £204bn £206bn Source: Verdict, Fo
Slide 39: M&S Direct today – over 150m visits per year
M&S Direct today – over 150m visits per year and growing ahead of the market Footfall – M&S vs Market* 52 Week Ending Market Share 60% 8% 7% 50% 6% 40% 5% 30% 4% 20% 3% 2% 10% 1% 0% 0% 06-Jan-08 01-Feb-09 29-Mar-09 24-May-09 17-Aug-08 02-Mar-08 27-Apr-08 12-Oct-08 07-Dec-08 Aug-09 22-Jun-08 Mar-09 A
Slide 40: UK Stores/Direct split of sales
UK Stores/Direct split of sales GM Food M&S Stores Online Market Stores Online Figures are for 08/09
Slide 41: Multi-Channel format development plan
Multi-Channel format development plan • Short term service and operations • Mid term evaluation and trials • Long term aspirations
Slide 42: E-Com/Retail immediate priorities
E-Com/Retail immediate priorities • Availability • Service • Environment • Cost Management • Customer Data Management
Slide 43: Shop your way – already 10,000 per week
“Shop your way” – already @10,000 per week Phone 5% Online → Home 30% In-store 29% Online → store 36%
Slide 44: Website refresh today
Website refresh today – inspiring; ease of use More visible customer ratings Before After New ‘Add to Basket’ functionality Stock information and ‘e-mail when available’
Slide 45: Cost improvement programme
Cost improvement programme Reduce task SAVINGS Managing Drive Drive efficiency Efficiency + our people INVESTMENT Align our service mode Task Removal Productivity People Opportunity Stores ICOS Tilling Section Mgr span of control Till Points Food Fill Coaches & section Fitting Rooms GM Fill co-ordin
Slide 46: SCOT tills in Finsbury Pavement
SCOT tills in Finsbury Pavement
Slide 47: What next? Extensive evaluation of options
What next? Extensive evaluation of options • Global portfolio and format review • UK Space and services trials • Technical developments • Range extension online
Slide 48: The vision - a seamless multi-channel customer journey
The vision - a seamless multi-channel customer journey Customers M&S Brand many channels, one brand, consistent service & delivery In-store Online Phone Media/ Mobile TV Catalogue ℡ Products bought centrally Merchandised in subsets by channel Single view of the Customer accessible across all channel
Slide 49: Customer data management – a growth opportunity
Customer data management – a growth opportunity M&S Shoppers 2.5m Shop Online with M&S • Most M&S customers Shop Online elsewhere 8m do not yet shop M&S online • But at least 8m shop online with competitors, spending £1bn 21.5m Don’t Shop Online Source: M&S Card data, FashionTrak, Internal Analysis
Slide 50: Summary
Summary • Multi-channel retail is the way forward • M&S has a huge opportunity • Focus on core business foundations • Deliver on multi-channel short term goals • Assess/trial options
Slide 51: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 52: M&S International - Clem Constantine
M&S International Clem Constantine
Slide 53: Where are we now
Where are we now International: £m 2004/5 2008/9 5 year 08/09 % of M&S (inc Ireland) % change business Sales 456 898 +97% 10% Profit 65 116 +78% 15%
Slide 54: Where are we now
Where are we now International: £m 2004/5 2008/9 5 year 08/09 % of M&S (inc Ireland) % change business Sales 456 898 +97% 10% Profit 65 116 +78% 15%
Slide 55: Where are we now
Where are we now International: £m 2004/5 2008/9 5 year 08/09 % of M&S (inc Ireland) % change business Sales 456 898 +97% 10% Profit 65 116 +78% 15%
Slide 56: Where are we now
Where are we now International: £m 2004/5 2008/9 5 year 08/09 % of M&S (inc Ireland) % change business Sales 456 898 +97% 10% Profit 65 116 +78% 15%
Slide 57: Our plan is to grow
Our plan is to grow Grow Grow our our Build Build Accelerate Accelerate Central Central and and sustainable sustainable Continue Continue to to growth growth with with Eastern Eastern businesses businesses inin explore explore new new franchise franchise European European India India and and opportu
Slide 58: Accelerate growth with our franchise partners
Accelerate growth with our franchise partners • 19 partners, 26 countries, 197 stores • 35+ years experience franchising overseas • Average stores size 10k sq ft • Franchise sales 30% of total international • 2 largest partners 48% of franchise sales Franchise FIBA Al Futtaim
Slide 59: Grow European joint ventures
Grow European joint ventures Greek Joint Venture Czech Joint Venture
Slide 60: Growing a business in India
Growing a business in India • Total population 1.2 billion Delhi • 35 million household Mumbai incomes of >£10k p.a. Kolkata • 7 key cities population 72m Pune Hydrabad • 50 stores in 5 years Chennai Bengaluru
Slide 61: India – Product, Price, Property
India – Product, Price, Property • Product – Colour – Styling – Pack sizes – Transitional product – Local sourcing • Pricing • Property
Slide 62: Developing a business in China
Developing a business in China • Total population 1.3 billion • Wholly owned • 3 key regions for growth • Focus on property, product & local sourcing
Slide 63: Developing a business in China
Developing a business in China
Slide 64: Explore new opportunities
Explore new opportunities • Build international food business – Ambient, Food to Go, Fresh & Chilled – Standalone stores, store in stores • Evaluate new markets
Slide 65: Drive operational excellence
Drive operational excellence • Product • Pricing • Property • Operations
Slide 66: Our plan is to grow
Our plan is to grow Grow Grow our our Build Build Accelerate Accelerate Central Central and and sustainable sustainable Continue Continue to to growth growth with with Eastern Eastern businesses businesses inin explore explore new new franchise franchise European European India India and and opportu
Slide 67: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 68: Q&A
Mas Q&A
Slide 69: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 70: Foods - John Dixon
Mass YOUR Foods John Dixon
Slide 71: 32m customers shop at M&S each year
32m customers shop at M&S each year Clothing & Home Food 25m customers 20m customers Clothing & Home Food 39% 38% 23% 78% of spend SOURCE: CIU Analysis
Slide 72: 1 in 2 households buy food from M&S over the course of the year
1 in 2 households buy food from M&S over the course of the year Household Numbers 21.7m 17.7m 16.9m 15.7m All Continental Discounters 15.7m 12.3m 11.5m 5.9m SOURCE: TNS
Slide 73: M&S is a secondary top up shop for most customers
M&S is a secondary top up shop for most customers Huge opportunity for us to increase basket size Regular customer Occasional customer Customers 20% Customers 80% 80% 20% REGULAR OCCASIONAL Once a month 1.5 x a week or less 7 items 4 items 21% Share of Wallet 3% Share of Wallet
Slide 74: M&S Food provides something different to the competition
M&S Food is famous with its customers for providing something different to the competition More Special Something Different Offering the Best Quality Source: Millward Brown
Slide 75: Key actions since last year
Key actions since last year… • Pricing adjusted to improve comparative values and Wise Buy campaign initiated • Dine In promotions utilised to drive footfall • Pace stepped up in innovation • Management team restructured • Allocation team increased – availability and waste improved • Programme of in
Slide 76: Grocery Market
Grocery Market M&S holding position; getting closer to market growth Retailer Sales Growth Grocery 12we 06th September 2009 Source: TNS
Slide 77: Grocery Market growth driven by price inflation
Grocery Market growth driven by price inflation in most retailers …M&S deflation Groceries Removing Price Inflation 15 10 +5.4% 5 +1.3% 0 Market & Cont. Source: TNS SuperPanel Food & Drink (excl Alcohol / Horti) 24 w/e 06Sep09 – M&S adj using internal data
Slide 78: Footage growth in top UK grocers estimated to grow c3% in 2009
Footage growth in top 8 UK grocers estimated to grow by c3% in 2009 – ahead of M&S Space growth by retailer 2009 vs 2008 Source: Verdict & Internal analysis for M&S
Slide 79: Key actions since last year
Key actions since last year… • Pricing adjusted to improve comparative values and Wise Buy campaign initiated • Dine In promotions utilised to drive footfall • Pace stepped up in innovation • Management team restructured • Allocation team increased – availability and waste improved • Programme of in
Slide 80: Establishing M&S as the leading quality food retailer
We will increase sales by establishing M&S as the leading quality food retailer Giving our customers… The most convenient product & locations The best quality Leading innovation Our mission is to provide the best quality food at First class great value, continually innovating and setting the service
Slide 81: Increasing share of grocery spend
We will deliver our vision and increase share of grocery spend through improving… Innovation & Range Price & Promotion Customer Service & Availability Access to the Brand
Slide 82: Innovation & Range
Innovation & Range • Programme of constant and genuine innovation planned, setting the benchmark for the food industry • Target 25% of catalogue delivering genuine newness every year beginning this year • Credible range to cover all regular grocery shopping needs • Range innovation throughout the ch
Slide 83: Innovation & Range
Innovation & Range The leading drivers to rejuvenate our innovation agenda Wellness and Health The best of Restaurant, Delicatessen & Home Cooking solutions Events and Entertaining Destination Categories
Slide 84: Innovation & Range
Innovation & Range • A credible range to increase share of regular customers’ spend • Breadth not depth through edited choice • Add 800 lines including edited range of grocery brands • Inclusion of top brands will increase customer choice and highlight M&S value
Slide 85: Innovation & Range
Innovation & Range Innovation and effective We will deliver planograms for all ranging has to be visible categories and enforce in store across all formats to implementation deliver for the customer To •Ranging team created •Tactical ranging system solution 2009/10 • Full solution including space pl
Slide 86: Price
Price Prices at values that make LFL basket price comparison with sense to the customer versus other grocers Retailer % Variance From Survey Average the competition 15% •Price position improved – Price investment program started cheaper than Waitrose 10% •08/09 M&S deflationary in 5% inflationary gr
Slide 87: Price
Price Wise Buys communicate price message without compromising quality
Slide 88: Promotions
Promotions Key to ensuring customers recognise our value and spend more …opportunity to increase M&S basket % of product sold on promotion now Dine In menu promotion strong in line with market appeal for all customer types Source TNS World Panel Grocery
Slide 89: Promotions
Promotions Focus on improving promotions •New central team •Reducing number of mechanics •Targeting appropriate promotions by product type •Enhanced analysis & improved profitability •Greater understanding of customer behaviour
Slide 90: Customer Service
Customer Service Customer service proposition to match the quality of our food •Availability •Inspiring store environment •Innovative in-store facilities
Slide 91: Customer Service
Customer Service Opportunity through system investment to significantly improve availability…and sales & profit Background •Legacy systems constraining ability to react & effectively manage end to end supply chain and expanded store portfolio To date •Merchandising team restructured to deliver impro
Slide 92: Access to the brand
Access to the brand • M&S food convenient for the M&S food market share customer whether at home, 08/09 at work or travelling • Aim to be within 10 minutes drive of most potential customers – currently still only 51% • Car parking wherever possible – all new stores other than high traffic city/trave
Slide 93: Access to the Brand
Access to the Brand There remain significant conurbations where we are under represented and can grow market share Strong city: Edinburgh Weak city: Sheffield Food market size £1460m Food market size £1240m M&S food sales £103m M&S food sales £37m M&S food share 7.1% M&S food share 3.0% (was 4% in 2
Slide 94: Access to the Brand
Access to the Brand Expansion can be delivered through main chain food halls and Simply Food stores Main Chain Out of town with parking - Relocations from High Streets - New locations Simply Food Edge of town with parking 7 – 12k sq ft Small convenience stores only in urban/travel locations Simply F
Slide 95: Summary
Summary • Progress made over the past year • Clear plan in place • Better values, innovation and availability being delivered • Credible range identified to target more of a main shop • Stronger management team in place • Short term focus balanced with longer term vision
Slide 96: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 97: GM Strategy - Kate Bostock, Scott Fyfe
GM Strategy Kate Bostock Scott Fyfe
Slide 98: Current Environment – General Merchandise
Current Environment – General Merchandise • Our performance • Market share • Operational efficiencies
Slide 99: Mission statement
Mission statement World leading quality retailer, providing aspirational clothing, home products and services to our customers, any time, anywhere.
Slide 100: Our plan
Our plan Market Broad Share customer Opportunities base Improving operational Brand efficiencies segmentation M&S Customer New Quality and markets innovation Multi- Price channel architecture
Slide 101: Market share opportunities
Market share opportunities 52 we Aug 09 52 we Aug 09 Market Share of Clothing and Footwear Value Volume 10.7 11.2 6.2 4.9 5.4 3.3 4.2 2.3 3.9 9.5 3.2 2.7 3.1 10.1 3.0 8.9 2.6 4.8 1.9 2.2 0.7 0.3 Source: TNS
Slide 102: Market share growth opportunities: Womenswear
Market share growth opportunities Womenswear
Slide 103: Market share growth opportunities: Menswear
Market share growth opportunities Menswear
Slide 104: Market share growth opportunities: Lingerie
Market share growth opportunities Lingerie
Slide 105: Market share growth opportunities: Kidswear
Market share growth opportunities Kidswear
Slide 106: Market share growth opportunities: Homeware
Market share growth opportunities Our mission is to grow Homeware Share 2009 #1 Towels 7.9% 5.6% 4.9% Plain dye bedding #4 4.5% 6.1% 4.1% #10 Kitchen 4.1% 1.7% 3.5% 3.4% #11 Home accessories 3.2% 1.3% 2.8% #12 Soft furnishings 0.8% 2.3% Source: Verdict – Homeware and Furniture retailers 2009
Slide 107: Slide 107
Slide 108: Brand segmentation
Brand segmentation Our customer
Slide 109: Brand segmentation: Our sub brands
Brand segmentation Our sub brands WOMENS LINGERIE MENS KIDS HOME Life- style Older customer Younger customer
Slide 110: Autograph
Autograph Se
Slide 111: Dressed-Up Elegance
" Dressed-Up Eleg Loving European Style
Slide 112: Portfolio
veTine @ PORTFOLIO Time With The Family
Slide 113: Denim
Denim sosec} Time With Friends
Slide 114: Limited Collection
LIMITED COLLECTION
Slide 115: Blue Harbour
al BLUE HARBOUR
Slide 116: North Coast
NORTH COAST
Slide 117: Collezione
Slide 118: Brand segmentation
Brand segmentation • Drive sub brand to complement core M&S brand • Segmentation of offer by lifestyle as well as customer profile/age • Improved ease of customer navigation in store • Drive growth of market share
Slide 119: Broad and competitive price architecture
Broad and competitive price architecture Good Better Best Belted Mac Shawl Collar Belted Wrap Coat ¾ Sleeve Bow Tie Neck Coat Polycotton Poly wool mix 100% Cashmere £35 £69 £199
Slide 120: Develop multi-channel offer
Develop multi-channel offer
Slide 121: New markets and opportunities
New markets and opportunities
Slide 122: GM Operational Efficiencies
GM Operational Efficiencies Scott Fyfe Commercial & Operations Director, GM
Slide 123: Our plan
Our plan • Improved stock management • Less duplication and better cataloguing • Improved availability • Better sourcing
Slide 124: Our plan
Our plan
Slide 125: Availability
Availability • New stock and allocation systems • Improved logistics network • Multi channel
Slide 126: Our sourcing
Our sourcing
Slide 127: Sourcing regions: Europe & North Africa, Far East, South Asia
Europe & North 40-45% Africa Region 15-20% Far East Region • Fashion • Innovation • Fast response • Embellishment • Added value product • Values • Using indigenous fabric base • Skills base South Asia & South Africa Region 35-40% • Core Basics • Values • Embellishment • Duty & quota benefit
Slide 128: Our ethical sourcing
Our ethical sourcing
Slide 129: Our ethical sourcing
Our ethical sourcing
Slide 130: Summary
Summary • Market Share growth opportunities • Brand segmentation • Broad and competitive price architecture • Develop multi-channel offer • New markets and opportunities • Improving operational efficiencies
Slide 131: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 132: Q&A
Mas Q&A
Slide 133: Investor Day
Mass YOUR Investor Day 13 October 2009
Slide 134: Investor Day
Mass YOUR Investor Day 13 October 2009
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