Marks & Spencer revamps retail strategy

As foreign brands like FCUK, Promod, Miss Sixty and Gas increase their presence in the country, it is only sensible that those that have existed for a while revise their strategies to maintain their hold on the market.

And this is exactly what Marks and Spencer (M&S) is doing. Having entered the Indian market almost six years ago through its franchisee partner Planet Retail, M&S enjoyed the first mover advantage.

But with Planet Retail now becoming the launch vehicle for direct competitors like Debenhams, Guess and Next, M&S is making a whole-hearted attempt to stifle competition by announcing a JV in India, dropping its prices by a steep 35 per cent, launching larger format stores and bringing in M&S Food and M&S kids' wear.

According to an M&S spokesperson, the 35 per cent price cut and an expansion in its store network will help the brand in widening its customer base.

"The price change will help customers experience M&S brands and products. Anyone who walks into an M&S store now will feel the difference in pricing, which will be one of the most competitive in the market," he adds.

Deepankar Sanwalka, executive director (retail and consumer markets), KPMG, says the move will benefit the brand. In other countries, M&S caters to the middle and upper middle -income groups.

However in India, only the affluent could afford it but even they did not spend much at M&S. "They have the choice of travelling abroad and avail of the variety that the brand offers there. The price cut will allow M&S to attract consumers that it internationally caters to as well," says Sanwalka.

The company plans to have 15 stores by the end of this year and with its newest store at the Ambience Mall in Gurgaon, it launched its first large-format store (22,000 sq feet) in the country. Here it has introduced the brand's own line of food products, M&S Foods, considered a notch above Tesco's and Sainsbury's. The company claims that the price cut and the large-format store has doubled its footfalls.

However, footfalls may not always translate into sales. Though M&S is confident that Indian consumers will experiment with new products, it remains to be seen whether they will splurge on ready-to-eat products given the country's obsession with fresh food.

"Food might not be a huge turning point for M&S but it might be well received due to brand recall. However, it will face competition from other ready-to-eat food brands," says Sanwalka.

M&S may have an annual turnover of over 8 billion pound sterling ($16 billion) and 150 stores worldwide, but whether its re-worked strategy will work is anyone's guess.