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LONDON: British retailer Marks & Spencer, seeking to avoid a repeat of last Christmas when its performance was ruined by excessive food waste, is implementing a supply chain program that it says will solve the problem.
Reporting on holiday trading in January, two months before the COVID-19 pandemic paralyzed much of Britain, Chief Executive Steve Rowe said that while M&S had enjoyed record food sales, its profit margins they were affected by high levels of waste.
M&S typically accounts for more than 3 per cent of the UK grocery market, but at Christmas it exceeds its weight, selling, for example, one in four of all fresh turkeys consumed.
However, the group has been affected by food availability problems and waste levels that are among the highest in the industry.
For Rowe, trying to boost the M&S fortune after a decade of failed reinventions, the antidote to waste is a supply chain initiative called Vangarde, named after the retail park in the northern city of York England, where the group frequently tries out new ideas.
“It will definitely restore the foundation for our business and the platform to grow,” Ryan Lemon, head of retail supply chain at M&S, told Reuters.
The Vangarde program aims to make all parts of the M&S supply chain work better, from planning and suppliers, to logistics and stores.
Its first phase included 92 M&S stores served by a regional distribution center in Barnsley, northern England.
A second phase begins Monday with an additional 65 stores served by a regional distribution center in Thatcham, southern England, with a full rollout serving 595 stores by July 2021.
Lucy Silva, Llogistics manager, at Gist’s Thatcham logistics depot, near Reading, Britain, on Oct.9, 2020 (Photo: REUTERS / Beresford Hodge)
WASTE REDUCTION
“We believe that we are going to see an improvement in sales in these stores, a reduction in waste and an improvement in availability,” Lemon said.
He explained that Vangarde reduces total stock levels in stores, precisely tailors deliveries from warehouses to the needs of an individual store, and increases the number of deliveries to stores outside of business hours.
Environmental foods are delivered to stores consistently seven days a week instead of four or five earlier.
There are more frequent and smaller deliveries from M&S suppliers to regional distribution centers, with delivery times more aligned with the requirements of the store.
The shift patterns of M&S store workers have also been changed, so more are available to restock when stores are closed. That means customers don’t run into staff stacking shelves, a key benefit during the COVID-19 crisis.
The program also covers new technologies. For example, shop workers use portable Honeywell devices to measure stock levels.
“The customer will see a big difference because all Vangarde stores will be ready to go from the opening,” said Lemon.
COVID-19 means that Christmas 2020 is shaping up to be a unique business period.
“Last Christmas there were some big challenges. This Christmas there will be a lot of complexity in terms of customer behavior,” Lemon said.
“We are much better planned this year.”
