M&S working to improve 'outdated supply chains'

Will Green is news editor of Supply Management
26 May 2021

Marks and Spencer is continuing to roll out an improvement programme to address “outdated supply chains” after posting losses of £201.2m.

In results for the year to April 2021, M&S said its Vangarde supply chain programme, launched in 2020, was now operating in around 350 stores.

Last year M&S said Vangarde “aims to reduce waste and improve customer experience through improved shop keeping processes such as better forecasting, allocation and stock counts”.

In the latest results M&S said a transformation programme started three years ago aimed to restore growth by “facing into the facts the business had failed to address”.

This included investing in online and digital capability and “tackling both the high cost and outdated supply chains”.

M&S said it had delivered more than £180m of cost of goods savings over the past two years, including “optimising volume with strategic suppliers, reducing packaging costs and respecifying ingredients”.

The company said Brexit had increased costs, in terms of administration and tariffs, by £42-47m, the bulk of which related to the island of Ireland. It is considering initiatives including a review of European business models, local sourcing and re-routing of products through European hubs.

“The most challenging effect of the Brexit deal is to make the supply of fresh and chilled product, especially prepared food, into the EU very lengthy and bureaucratic creating an enduring impact on availability and trading costs,” said M&S.

“This situation is unlikely to improve in the near term and we therefore need to reconfigure trading with our EU businesses.”

Overall revenues were £9.2bn, down on £10.2bn in the same period of 2020.

CEO Steve Rowe said: “In a year like no other we have delivered a resilient trading performance, thanks in no small part to the extraordinary efforts of our colleagues.

“In addition, by going further and faster in our transformation through the Never the Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S. With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase.”

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