Marks and Spencer's benefits from health boom

By James Knowles

- Last updated on GMT

Related tags: Cent, Tesco, Asda

Marks and Spencer's said yesterday it has increased its slice of
the UK's food market to four per cent from 3.8 per cent by taking
advantage of booming health trends.

It has been a successful financial half year for the diversified retailer, whose operating profit soared by 22.9 per cent to £448.8m (€669) in the 26 weeks to 30 September.

The company's food division increased its gross margin by 34.3 per cent during the period, with a 10.1 per cent rise in total food revenues. Like-for-like food sales rose 5.3 per cent during the period.

"We have gained market share in all areas in which we trade. We continue to invest in our stores to provide for future growth,"​ said Stuart Rose, chief executive of Marks and Spencer's.

Marks and Spencer's says its food division's success is due to a concentration on products aimed at meeting the demand for healthier foods. About 30 per cent of the company's food products are marketed under its 'eat well' logo.

It has expanded the 'eat well' range into healthy ready meals, developing additive-ree 'Cook!' and "Speciality" brands. The company claims to be the first supermarket to remove trans fats from all of its products.

During the first half of the company's financial year, Marks and Spencer's also launched new Fairtrade and organic products as well as Omega-3 enriched Lochmuir Salmon.

The supermarket is also extending its 'Simply Food' retail portfolio with the acquisition of 12 new stores. The company plans to make further investment in recruiting and training specialist staff.

The trial of 'Simply Food' being sold in BP forecourt locations has been successful, and the operation will be rolled out further next year, the company stated. It has identified another 200 locations where the brand could be added.

Tesco is the largest food retailer in the UK market, holding a 31.4 per cent share, according to analyst Taylor Nelson Sofres. Tesco is followed by Wal-Mart Stores unit Asda, which holds 16.6 per cent share, and by Sainsbury's, which holds a 15.7 per cent share. The fourth largest food retailer is Morrisons, which has a 11.1 per cent share.

Related topics: Market Trends

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