M&S aims to enhance its global market presence by reducing prices in its international stores.
- CEO Stuart Machin has identified a significant price disparity impacting the competitiveness of its overseas outlets.
- The retailer’s Singapore market is notably more expensive, leading to a strategic price review.
- Current contractual arrangements with franchise partners are contributing to high prices.
- Plans include re-evaluating franchise agreements and trialing new products to boost international sales.
Marks & Spencer (M&S) is embarking on a strategic initiative to enhance its international business by implementing price cuts in overseas stores. This move is aimed at addressing the current pricing discrepancies that exist between M&S stores and local competitors in various markets.
The company’s CEO, Stuart Machin, highlighted that one key issue affecting M&S’s competitiveness in international markets is the considerably higher pricing compared to local rivals. In Singapore, for instance, M&S items are priced approximately a third higher than those of competitors, a situation that Machin is keen to rectify.
Machin has explained that the inflated prices are largely due to both M&S and its franchise partners making margins on the same products. He noted that, unlike domestic operations, there is currently no balanced profit-sharing arrangement with international franchise partners, which contributes to this pricing issue.
In response to these challenges, Machin has indicated the need to renegotiate franchise contracts to create more equitable terms, which would help lower prices and expand product offerings. The current agreements tend to place greater risk on partners, who have thus been conservative in their product selections, opting only for best-selling, safe choices each year.
To further invigorate its international presence, M&S is considering the trial of new product lines overseas and aims to streamline the process of bringing stock into these markets more efficiently. With 434 international stores, 264 of which are franchised across Asia, the Middle East, and Europe, these changes could significantly impact M&S’s global footprint.
M&S’s strategic adjustments in pricing and product strategy aim to restore its competitiveness abroad.
