Marks & Spencer saved £35m last year through efficiency improvements in its supply chain including warehouse consolidation and implementation of a number of efficiency projects.
In its results for the year to 27 March, it said the first phase of its warehouse consolidation programme was well under way with the closure of 21 of the 110 sites.
“Our new one million sq ft warehouse in Bradford opened this month, on time and on budget. We have identified a second site in the Midlands which will be a combined national distribution centre and a dedicated e-commerce facility. Subject to planning permission, we will start construction in the new year, and plan to open in Summer 2012.
Total investment in supply chain and technology last year was £194m – up from £188m in 2008-9.
The group has focused on simplifying its supply chain and said it has trialled a simplified ‘single touch’ process in Kidswear which enables it to move products more quickly, reducing lead times and the number of times stock is handled.
M&S is also overhauling its IT systems. “In stores, we are implementing an improved stock management system, which will provide more accurate real-time stock level information. We will also roll-out the new point of sale system, to all stores, due to be completed in 2011. The new software will deliver cost efficiencies as well as an enhanced customer experience.”
In addition, it said it was well underway with the roll-out of SAP as its core business system. “Over the last few months Phase 1 of SAP has been successfully implemented in Foods, and we have begun its roll-out into General Merchandise.”
Direct sales were up 27 per cent to £413m. “We outperformed the on-line clothing market, and grew share to 5.6 per cent from 5.3 per cent (Kantar Worldpanel: 52 weeks ended 28 Mar 2010). Site traffic grew by 30 per cent.
“This year we consolidated all of our shopping channels to become a seamless multi-channel business, providing customers with the same high quality service every time and whichever way they choose to shop with us.
“We replaced our old in-store ordering system, with a new click and collect service called ‘Shop your Way’. It allows customers to order either at home or in store and have merchandise delivered to any location. It is now available in over 300 stores, and will be in all stores by the end of this year, including a trial in selected Simply Food stores.”
Group operating profit for the 52 weeks was up 1.4 per cent to ££779.3m on sales up 3.2 per cent to £9.3bn.
Chairman Sir Stuart Rose said: “We have had a satisfactory start to the first quarter. Consumers are naturally concerned about any impact of the Budget on 22 June. We therefore remain cautious about the outlook for the year ahead.”