Deliver target operating margins

As we move into the next phase of our transformation, Reinvesting for Growth, we have a clear plan centred around three key areas of disciplined investment. This includes supply chain and building capacity in both our Food and Fashion, Home & Beauty businesses, which we took our first steps towards this year.

In Food this year we announced investment to build two new Food distribution centres in Avonmouth, Bristol and Daventry, Northamptonshire supporting our goal to double the size of the Food business. Once opened, these new facilities will add 1.7 million square foot of additional capacity in our network, and future proof our supply chain, serving our Food stores with better availability for customers and faster deliveries and simpler stock and fill processes for colleagues.

Sustainability is also integral to the designs of the new distribution centres. In Daventry for example, the site is targeting a BREEAM Outstanding rating and will be M&S’s flagship Plan A warehouse, featuring responsibly sourced and recycled building materials, renewable energy generation and energy saving technologies, supporting will support M&S’s net zero ambitions.

In Fashion, Home & Beauty, we took the first major step forward in fixing the backbone of the business this year – acquiring a 437,000 square foot, modern, fully automated fashion distribution centre in Lichfield.

M&S’ long-term ambition is to double the size of its online fashion businesses and to achieve this and serve our customers faster, more efficiently and with better availability, our 24/7 distribution network needs more capacity. The new Lichfield logistics hub will add capacity and process orders quickly and help to deliver more of M&S fashion faster than ever before, enabling customers to order later in the day and with more sizes and styles available. The acquisition delivers tangible business benefits that move our transformation forward, at a much lower cost compared to a new build option.

As these examples show, supply chain transformation is a strategic priority for M&S; shortening the time it takes for product to move from supplier to distribution centre and then into stores or customers is a key focus. There is much opportunity to create a better proposition for customers, drive growth and make efficiencies to improve profit margin across the business in the long term.