© Reuters. An M&S store is pictured on Oxford Street in London
By James Davey
LONDON (Reuters) – UK retailer Marks & Spencer, trying to avoid repeating last Christmas when its performance was hampered by excessive food waste, is launching a supply chain program to help address the problem.
Steve Rowe, Chief Executive Steve Rowe, covered the celebratory trade in January, two months before the COVID-19 pandemic disrupted much of the UK. While M & S has achieved record sales in food, its profit margins have been affected by high levels of waste.
M&S typically makes up just over 3% of the UK grocery market, but at Christmas it beats over its weight and sells, for example, every fourth fresh turkey consumed.
Even so, the group has been haunted by food availability and waste issues that are among the highest in the industry.
For Rowe, who after a decade of failed reinvention attempts to grow M & S's fortune, the antidote to waste is a supply chain initiative called Vangarde – named after the shopping park in the northern English city of York where the group often creates new ones Testing ideas.
"It will definitely reset the foundations of our business and the platform for growth," Ryan Lemon, retail supply chain manager at M&S, told Reuters.
The Vangarde program aims to make all parts of the M&S supply chain function better, from planning to suppliers to logistics and branches.
The first phase included 92 M&S branches served from a Regional Distribution Center (RDC) in Barnsley, Northern England. A second phase begins on Monday with another 65 branches served by an RDC in Thatcham, southern England. 595 branches will be fully launched by July 2021.
"We believe we will see an improvement in sales, a reduction in waste and an improvement in availability in these stores," Lemon said.
He explained that Vangarde is reducing overall inventory in stores, tailoring deliveries from depots to the needs of an individual store, and increasing the number of deliveries to stores outside of trading hours.
Local groceries are regularly delivered to stores seven days a week instead of four or five.
There are more frequent and smaller deliveries from M&S suppliers to RDCs, with delivery times more closely aligned with store requirements.
M&S store staff shift patterns have also been improved so that more inventory is available when stores close. That means customers won't run into employees stacking shelves – a key benefit during the COVID crisis.
The program also includes new technologies. For example, workers in the shop use Honeywell (NYSE 🙂 hand-held devices to measure inventory.
"The customer will see a massive difference as every Vangarde store is ready to trade from the moment it opens," said Lemon.
COVID means that Christmas 2020 will be a unique trading period.
"Last Christmas we had some big challenges. This Christmas, customer behavior will be very complex," said Lemon.
"We're much better planned this year."