Marc Bolland, chief executive, told investors at a presentation in Istanbul he had been “encouraged” by food sales in M&S’s two Paris flagship shops and that the British retailer is now in talks with potential franchise partners interested in expanding its Simply Food stores across France.
The performance of M&S food in France has been a highlight of a mixed international performance for the 129-year-old retailer. Its Irish and Greek businesses have been under pressure from the eurozone debt crisis, while its Chinese stores are thought to have missed sales targets. Mr Bolland told investors that M&S plans to “take stock” and “evaluate” its Chinese business.
There has been strong demand from Parisians for traditional British delicatessens such as biscuits and jam, but also M&S’s ready meals and salads.
As a result, it is understood that companies have expressed an interest to M&S in opening Simply Food stores in travel locations across France. M&S has already used a franchise model to expand Simply Food across the UK.
Mr Bolland, the former boss of Wm Morrison Supermarkets, said the expansion plans for Simply Food would be limited to western Europe and locations where the retailer can deliver fresh food within a day from its food distribution centres in Britain.
“It has to be same-day delivery. That is critical,” Mr Bolland said.
Mr Bolland said that sales at the company’s major new Paris store at So Ouest are 26pc ahead of plan and that the shop will be profitable within two years.
However, he declined to comment on stories that M&S’s 14 stores in China which are all in Shanghai - have missed internal targets by as much as 30pc.
“It is very obvious that it is a fantastic market. But it is also a difficult market,” Mr Bolland said.
After a wave of store openings in the last two years, M&S is now “evaluating” its model in China and could seek a joint venture partner to support future expansion. Mr Bolland said this strategy was what he “promised” the market in 2010 when he laid out his plans to turn M&S into an international, multi-channel retailer.
In contrast to the slowing of store openings in China, Mr Bolland is planning to ramp up M&S openings in India. The retailer has 30 stores in India but wants to have 80 by 2015/2016.