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Forget Fashion: Why Marks & Spencer Refocused on Food

U.K. retailer Marks & Spencer is focused more on store technology and online delivery these days as it eyes services to offset deteriorating store sales in apparel and home.

It’s already testing a contactless delivery service for its click-and-collect program, and starting Tuesday consumers can begin to receive food deliveries through M&S’s partnership with home shopping service Ocado. M&S raised 600 million pounds ($797.1 million) in August 2019 for a 50 percent stake in Ocado Retail, a joint venture with Ocado Group plc, a software and robotics platform business.

“Our partners at Ocado are getting ready for the launch and they have now begun to make all our M&S products available for their customers to add to their baskets for delivery slots starting from 1 September,” M&S said on its website.

Virtually all apparel retailers globally have been impacted by the Covid-19, pandemic, particularly as governments mandates temporarily shut down brick-and-mortar retail. Merchants selling essentials have been the beneficiaries of the new normal that has kept many consumers wary of setting foot in store. And while many retailers have e-commerce platforms through which to sell apparel during the closures, the consumer’s attention has been, and continues to be, focused more on necessities.

In the U.S., mass discounters such as  Walmart and Target remained opened during the COVID-19 outbreak and saw consumer demand skyrocket for food, paper goods and cleaning products as they shopped online. And while both are seeing consumers pick up the pace on purchases of casual and loungewear-focused apparel merchandise, what’s not leveling off is the growth rate for online. What’s also spiking higher, especially at Target, has been growth in same-day services and other forms of contactless delivery.

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Those trends in the U.S. are similar to what U.K. high-street retailers have been experiencing throughout Covid-19’s disruption. While food halls were able to remain open during the outbreak, it was online delivery services that saw growth across the pond, not unlike the growth in the U.S. seen from the likes of Fresh Direct and Thrive Market.

The coronavirus pandemic has toppled Debenhams, into administration, the U.K. equivalent of a bankruptcy in the U.S. Many retailers have also resorted to reducing headcount to survive amid the downtown as consumers continue to stay away from brick-and-mortar stores. Debenhams said it would cut 2,500 roles at its department store operations, joining the job-cutting likes of John Lewis, Harrods, Topshop owner Arcadia Group and Selfridges, to name a few.

Even M&S wasn’t immune—after cutting 950 jobs, the company last week said it will lose another 7,000 over the next three months. M&S is compressing its turnaround plan from three years to 12 months, investing more in online fulfillment as it looks to reshape its store portfolio.

In its update on operations last week, M&S said online sales from mid-June to mid-August represented 41 percent of the company’s total clothing and home sales, with the retailer noting that 68 percent of orders have been delivered to homes, versus 29 percent for the same period a year ago. The chain also noted that following a successful relaunch in July, 8.2 million customers are now members of its new Sparks program, and over 800,000 have downloaded the M&S app since launch. The Sparks digital first loyalty program offers a more personalized experience with instant rewards and tailored personal offers.