Marks & Spencer: can private brands cook up more sales or is this taking a bite out of a successful strategy?

Own-brand department store retailer Marks & Spencer has seen its shares plunge recently after warning of a tougher high-street climate ahead. The brand, which has famously only ever stocked its own-label products, confirmed in May that it would start to stock other brands, including Heinz and Kellogg’s.

So will this strategy entice in more shoppers? Chief executive Stuart Rose argues that the brand needs to respect how its consumers shop and they like the convenience of finding all their goods under one roof. The Sun newspaper quotes him saying: “Customers say to me, ‘We love your store, we love your food but my husband loves Marmite – and we can’t buy it from you’. Others say the same about Weetabix. I like Tabasco but I can’t buy it at M&S. This move shows we’re listening to customers. We’ll see what happens – at the end of the day, we don’t want to waste valuable space offering things for sale that people don’t want.”

What do you think of this strategic move? We at Brand Strategy are not convinced that this is the right direction. Do M&S customers go there for their weekly shops in the same way they visit Tesco? We think not. A recent article on the BBC website cited Verdict Research which suggested that shoppers are becoming more promiscuous, picking their goods from a wide variety of stores. They will happily visit multiple stores to save cash on the items least important to them, while they keep spending on areas that really matter to them.

We would suggest that people visit M&S because it is a bit different from other food retailers out there. For example:

- It has been running a poster campaign for several years now, citing its commitment to areas such as free-range eggs and getting trans-fats out of its products. This means that consumers don’t have to worry about whether they’re doing the right thing ethically when buying; M&S does it for them. But this strategy only works as long as M&S has full control of the product supply chain. It opens up the whole concept behind ‘Plan A‘ to question if M&S isn’t handling everything itself.

- The idea that ‘this isn’t just food, this is M&S food’ breathed heavily over delectable images has less credibility if it is not just M&S food, it is in fact the same old food that you can buy anywhere. It might be a small change, but it does undermine the strategy that M&S has used to such success, differentiating itself from precisely the kind of labels it may now stock.

Could it spread to more areas of the business? Might we soon start seeing clothing concessions appearing? Perhaps M&S might start stocking labels such as formerly-fusty-but-now-funky-and-fashionable Jaeger as part of its upmarket, trendy Limited Collection offerings? Where will it end?

Let us know your views. Are we being Luddites, clinging to the past of M&S, while it needs to move on and embrace a future of convenience shopping? Won’t shoppers simply find it useful to buy Heinz beans or ketchup there and think no more of it? Tell us what you think!