Investor Day

13 October 2009
Investor Day

Stuart Rose
Chairman
Investor Day

13 October 2009
Project 2020

Ian Dyson
Project 2020
Three key objectives
– Increase the pace of change and operational execution

– Accelerate towards becoming a multi-channel retailer

– Drive our International business

Project 2020: The vision
From cyclical… … to long term sustainable growth

Profit, £m
Project 2020
• To create long term sustainable growth
• We want to move:

From To
Product focused Customer focused
Store centric Multi-channel
UK dominated International

• First phase: Laying the foundations

Project 2020: Laying the foundations

Restructure Implement new Drive operational

Supply Chain IT systems execution

Deliver operating cost efficiencies

Drive sales growth
Provide a platform for growth
Restructure supply chain
Efficiency Contract renegotiation

 Fewer trucks

Too many trucks

Lots of manual  Streamlined processes
3PLs paid more
processes  Minimum 3% savings p.a. as costs rise  3PLs paid on results

Product handled twice  Product handled once
All Product sent  Product sent direct

100 sites  4 sites via UK hub to country of sale
Warehouse consolidation International supply chain
Implement new IT systems

Today
Today Strategic
Strategic programmes
programmes Future
Future
GM
Systems not shown: ECES, Prices from SPM Dublin
SPEX, IFG MIS.
EUROPEAN & IFG GM WIRING DIAGRAM - Aug 2007 Picking notes Joint Retail
Logistics
IFG, franchises MARGINS Picking notes, EDI picking
SAS receipts HISTORICAL deficiences, GATEW AY Avail. , Avail. Kewill or Suppliers
CMS
BPT SMaRT Product, sales, Finance SALES & Buying Furniture ref. def.,ref TRADANET
.
own system

Foods
catalogue cat picking, def.
restructures Depts. dept.
STOCK availabilities Cost price to SPI, Ratios, selling & production
CMS Allocations Sales and PROFIT and shipping data to IRD, SPA
eAPOL Xborder MERCHANDISE advices franchises (via
PRICECHANGER
& shipments invoices stock from catalogue to SMaRT Sends & availabilities
Finance Adj. to GSD
ALLOCATION PFR)
Buying Dashboard Hemel, IFG GSD Non-UK advices STOCK SMOOT HING LAUNCHER Launcher advices DUTY & PRODUCTION
Buying Depts, suppliersContract FABRIC QUOTA
INTERNATIONAL RING F ENCE MNGR. merged with MAS advices SAP BUYING quantities SIZE MONITOR
Reserve & GM INT ERFACE HAN. Ratio changes
REFERENCE EXIT Invoices to Outlet team call-off supplier DASHBOARD /CDP
finance &
DATABASE PROF IT Avail GRD supplies reference data to VATall codes
systems QUALITY Sales and
Shipping data MSO - O UTLET SELLING GENERAL UPC allocation CMS INTAKE M&S TDS/ stock from
DIST RIBUTION CIS STANDARDS
from CMS cost prices PRICE REFERENCE PO PLANS XS SSD suppliers GSD
Stock New strokes

processes
Despatches MAINTNCE DATABASE
Receipts PO info

Business
IFG orders Outlets Specialist production,
PORTAL Price Prod LAB
Advised from EDI availability
Discrepancies
HFIS
Chan.islds.,maintenance ref
plan TechnologyREQUESTS
BPT Sterling to suppliers Product
ABC FOB prices Inventory Dublin, team QUOTE Series s &
details
IFOS
T AKINGS PSM
Thurrock,
Swindon,
outlets MODEL
Direct
currency Prod
EDIT RACK
RO Critical Path
Demand &
Supply Sell
Despatches T horncliffe,
DHL Leic. Picking Notes Depts from plans Regional Offices
PHOTO
web SPA & schedules
PBL Leic.
Pilot Depts
Finance (flows)
IMAGES
Cordvale
Cost
prices,
VAT
receipts Buying
from carriers
NDC
MUW S
4 P Black
NDCs
Range
Planning
Product
hierarchy (AP)
Reference data,
T47 design
IFG Depts &
cost price, Ref to MADE TO
rates Finance

Store Refresh (inc POS)

Franchise shipments Historical data Sales, stock, prod. COLLABORATOR
prod plans SSI via MEASURE
SUPPLIER Group receipts Purchase ICSS SUPVISOR
Delivere Buying Depts
RTMs from EDITRACK NDC EDITRACK Orders Buying Depts,
PAYMENTS d Supplier penalties Freight tracking Flows via stores.
& suppliers.
GSM receipts Estimates
INTERNATIONAL furniture Advices
APL & Maersk
Prod Plans GRD
and store Sales, stock, prod.
orders catalogue, OpenAccounts SAS UTILITIES Stock WSSI
Deliveries, Advices & builds
Country Cost prices RTMsdespatches & smoothing adj. Locator FURNI-
e.g. Lingerie
of
origin
from CMS
store returns
Inventory, receipts, RTMs
SALES &
STOCK mappings images
IMAGE
BANK TURE Range & space planning Amazon
DCs W arehouses &
Buying Depts
Cost prices
& VAT
rates
Ecommerce
team Internet
selling
DASHBOARD Sales,
DD attributes

CIU, e-planning GSM

Levy data

Sales & F ood sales

GM sales
GREEN DOT
(Excel) Reference
chart
Supply chain
Amazon

Business systems
stock etc. adj. stock
GTI activity Pilot stores Advices, smoothing adj. Food sales
Per Una, Elite Per Una

ETOX (Out
MUWS
RTW s
Avail. Orders

KUEHNE & NAGEL

Stock adjustments, inventory,
non-advised deliveries
GENERAL
SALES DATABASE
for Green
Dot Sales & adj

Deliveries & adj

MERCATUS
Ref. data
DSL
Sales, stockPLAN & MONITOR
Product development IPOS
Vehicle/URNs) Store counts SSS
ESR (HAYS) FURNITURE
DC movements, Orders CARRIER (IPDSS)
SSM RFID T ag associations
stock.
Accuracy file
Salesfloor
stock
Store Tunbridge DC
Store EXIT Sales Invoices from EXIT,
Warehouse management
Forecasting Hospitality
stock furniture Sales adj. advices, builds from MAS
Build count GRD & adj.
orders Promo Discount
adj. s -tions
Compensation Stores Home transactions Sales & adj Information
Stock & Furn., suppliers, carriers, IRS/ICSS (out) Sales
timeliness INT EGRATIO N Backbone

International
CMS, EDITRACK, advised M&S Money, HOCS Sales
PBL, EXIT HOPPA SERVICES ICSS (in) 20 F ranchises not on PROFIT:
DHL & (NDT) floor GRD BERMUDA, CANARIES1 &2,
Logistics Debit sales ICOS1/FIB DFMS deliveries Price Real stock Prices CROATIA, CYPRUS1&2, GREECE,
count

International solution
DHL to banks maintenance time for Sales Adj. GUERNSEY, HUNGARY, INDIA,
Logistics via CAT S MTM TRACOS HFIS team sales adj. Sales, INDONESIA, JERSEY, KOREA,
systems MIS SSM HHT
Packing Promotions adj.
inc. VISTA Orders Store stock OMAN, QATAR, T URKEY,
ETOS Tracking Hardwick, counts ROMANIA, RUSSIA, SLOVENIA,
SSI
T horncliffe Prices,
(In delivery financial Suppliers Globalstore SWITZERLAND.
Vehicles/ ref.
data data EDITRACK To mainframe MTM
URNs) QA Orders MTM
SPA Fujistu
Suppliers

KEY:
FDC

DCs
O ffshore warehouse

OpenAccounts
to MAS Sales Layout Guide

UK & Eire
ISR
ASR
POS GSM
Outlet stores
have prices
from SPM
PROFIT
REPORT
Finance
stores HONG KONG + 11 Franchises: WRITER
M&S UNIX Reference, orders HHTs for counting BAHRAIN, CZECH/POLAND, DUBAI/UAE,
UK, Eire, UK & Eire
Furniture Ordering and build maintenance
M&S mainframe Location of users (DEC Microvax
& ch. is. stores GIBRALTAR, KUWAIT, MALAYSIA, CZECH,
MALT A, PHILIPPINES, SAUDI, SINGAPORE, HK,
M&S distributed
Not ITG Supported
Direct access
Web access
Electronic transmission
at IS Solutions)
Furniture order
F urniture supplier
GIFT
REGIST RY
THAILAND, T AIWAN THAILAND

C. J. Slinn 09/08/07
HR

Data & information services

M&S Direct Reference data management

Sales aggregation

Enterprise data warehouse

Integration services

HR Customer Product Supplier Location Finances

infrastru
cture
Business Foundation

IT Foundation

IT Change programme

Complex Simple
Drive operational execution
Project 2020: Laying the foundations

Restructure Implement new Drive operational

Supply Chain IT systems execution

Deliver operating cost efficiencies

Drive sales growth
Provide a platform for growth
Supply chain and IT capex and benefits
By 2015/16: Total benefit £250m, total capex £1bn*
Benefits Capital expenditure

* Including £250m pre 2009/10

Project 2020
• To create long term sustainable growth
• We want to move:

From To
Product focused Customer focused
Store centric Multi-channel
UK dominated International

• First phase: Laying the foundations

Investor Day

13 October 2009
Supply Chain and IT

Darrell Stein
Summary
1 Supply Chain & IT operations is a key part of laying
the foundations

2 We have already delivered benefits

3 We have a plan and a great team to take us forward
Implement new IT systems

Today
Today Strategic
Strategic programmes
programmes Future
Future
GM
Systems not shown: ECES, Prices from SPM Dublin
SPEX, IFG MIS.
EUROPEAN & IFG GM WIRING DIAGRAM - Aug 2007 Picking notes Joint Retail
Logistics
IFG, franchises MARGINS Picking notes, EDI picking
SAS receipts HISTORICAL deficiences, GATEW AY Avail. , Avail. Kewill or Suppliers
CMS
BPT SMaRT Product, sales, Finance SALES & Buying Furniture ref. def.,ref TRADANET
.
own system

Foods
catalogue cat picking, def.
restructures Depts. dept.
STOCK availabilities Cost price to SPI, Ratios, selling & production
CMS Allocations Sales and PROFIT and shipping data to IRD, SPA
eAPOL Xborder MERCHANDISE advices franchises (via
PRICECHANGER
& shipments invoices stock from catalogue to SMaRT Sends & availabilities
Finance Adj. to GSD
ALLOCATION PFR)
Buying Dashboard Hemel, IFG GSD Non-UK advices STOCK SMOOT HING LAUNCHER Launcher advices DUTY & PRODUCTION
Buying Depts, suppliersContract FABRIC QUOTA
INTERNATIONAL RING F ENCE MNGR. merged with MAS advices SAP BUYING quantities SIZE MONITOR
Reserve & GM INT ERFACE HAN. Ratio changes
REFERENCE EXIT Invoices to Outlet team call-off supplier DASHBOARD /CDP
finance &
DATABASE PROF IT Avail GRD supplies reference data to VATall codes
systems QUALITY Sales and
Shipping data MSO - O UTLET SELLING GENERAL UPC allocation CMS INTAKE M&S TDS/ stock from
DIST RIBUTION CIS STANDARDS
from CMS cost prices PRICE REFERENCE PO PLANS XS SSD suppliers GSD
Stock New strokes

processes
Despatches MAINTNCE DATABASE
Receipts PO info

Business
IFG orders Outlets Specialist production,
PORTAL Price Prod LAB
Advised from EDI availability
Discrepancies
HFIS
Chan.islds.,maintenance ref
plan TechnologyREQUESTS
BPT Sterling to suppliers Product
ABC FOB prices Inventory Dublin, team QUOTE Series s &
details
IFOS
T AKINGS PSM
Thurrock,
Swindon,
outlets MODEL
Direct
currency Prod
EDIT RACK
RO Critical Path
Demand &
Supply Sell
Despatches T horncliffe,
DHL Leic. Picking Notes Depts from plans Regional Offices
PHOTO
web SPA & schedules
PBL Leic.
Pilot Depts
Finance (flows)
IMAGES
Cordvale
Cost
prices,
VAT
receipts Buying
from carriers
NDC
MUW S
4 P Black
NDCs
Range
Planning
Product
hierarchy (AP)
Reference data,
T47 design
IFG Depts &
cost price, Ref to MADE TO
rates Finance

Store Refresh (inc POS)

Franchise shipments Historical data Sales, stock, prod. COLLABORATOR
prod plans SSI via MEASURE
SUPPLIER Group receipts Purchase ICSS SUPVISOR
Delivere Buying Depts
RTMs from EDITRACK NDC EDITRACK Orders Buying Depts,
PAYMENTS d Supplier penalties Freight tracking Flows via stores.
& suppliers.
GSM receipts Estimates
INTERNATIONAL furniture Advices
APL & Maersk
Prod Plans GRD
and store Sales, stock, prod.
orders catalogue, OpenAccounts SAS UTILITIES Stock WSSI
Deliveries, Advices & builds
Country Cost prices RTMsdespatches & smoothing adj. Locator FURNI-
e.g. Lingerie
of
origin
from CMS
store returns
Inventory, receipts, RTMs
SALES &
STOCK mappings images
IMAGE
BANK TURE Range & space planning Amazon
DCs W arehouses &
Buying Depts
Cost prices
& VAT
rates
Ecommerce
team Internet
selling
DASHBOARD Sales,
DD attributes

CIU, e-planning GSM

Levy data

Sales & F ood sales

GM sales
GREEN DOT
(Excel) Reference
chart
Supply chain
Amazon

Business systems
stock etc. adj. stock
GTI activity Pilot stores Advices, smoothing adj. Food sales
Per Una, Elite Per Una

ETOX (Out
MUWS
RTW s
Avail. Orders

KUEHNE & NAGEL

Stock adjustments, inventory,
non-advised deliveries
GENERAL
SALES DATABASE
for Green
Dot Sales & adj

Deliveries & adj

MERCATUS
Ref. data
DSL
Sales, stockPLAN & MONITOR
Product development IPOS
Vehicle/URNs) Store counts SSS
ESR (HAYS) FURNITURE
DC movements, Orders CARRIER (IPDSS)
SSM RFID T ag associations
stock.
Accuracy file
Salesfloor
stock
Store Tunbridge DC
Store EXIT Sales Invoices from EXIT,
Warehouse management
Forecasting Hospitality
stock furniture Sales adj. advices, builds from MAS
Build count GRD & adj.
orders Promo Discount
adj. s -tions
Compensation Stores Home transactions Sales & adj Information
Stock & Furn., suppliers, carriers, IRS/ICSS (out) Sales
timeliness INT EGRATIO N Backbone

International
CMS, EDITRACK, advised M&S Money, HOCS Sales
PBL, EXIT HOPPA SERVICES ICSS (in) 20 F ranchises not on PROFIT:
DHL & (NDT) floor GRD BERMUDA, CANARIES1 &2,
Logistics Debit sales ICOS1/FIB DFMS deliveries Price Real stock Prices CROATIA, CYPRUS1&2, GREECE,
count

International solution
DHL to banks maintenance time for Sales Adj. GUERNSEY, HUNGARY, INDIA,
Logistics via CAT S MTM TRACOS HFIS team sales adj. Sales, INDONESIA, JERSEY, KOREA,
systems MIS SSM HHT
Packing Promotions adj.
inc. VISTA Orders Store stock OMAN, QATAR, T URKEY,
ETOS Tracking Hardwick, counts ROMANIA, RUSSIA, SLOVENIA,
SSI
T horncliffe Prices,
(In delivery financial Suppliers Globalstore SWITZERLAND.
Vehicles/ ref.
data data EDITRACK To mainframe MTM
URNs) QA Orders MTM
SPA Fujistu
Suppliers

KEY:
FDC

DCs
O ffshore warehouse

OpenAccounts
to MAS Sales Layout Guide

UK & Eire
ISR
ASR
POS GSM
Outlet stores
have prices
from SPM
PROFIT
REPORT
Finance
stores HONG KONG + 11 Franchises: WRITER
M&S UNIX Reference, orders HHTs for counting BAHRAIN, CZECH/POLAND, DUBAI/UAE,
UK, Eire, UK & Eire
Furniture Ordering and build maintenance
M&S mainframe Location of users (DEC Microvax
& ch. is. stores GIBRALTAR, KUWAIT, MALAYSIA, CZECH,
MALT A, PHILIPPINES, SAUDI, SINGAPORE, HK,
M&S distributed
Not ITG Supported
Direct access
Web access
Electronic transmission
at IS Solutions)
Furniture order
F urniture supplier
GIFT
REGIST RY
THAILAND, T AIWAN THAILAND

C. J. Slinn 09/08/07
HR

Data & information services

M&S Direct Reference data management

Sales aggregation

Enterprise data warehouse

Integration services

HR Customer Product Supplier Location Finances

infrastru
cture
Business Foundation

IT Foundation

IT Change programme

Complex Simple
Delivered to Date
• Strengthened team
• Corporate IT strategy
• Lower fixed costs
• Projects (examples):
– Finance, procurement
– Store refresh
– International system
– Ecommerce

Significant benefits already delivered to plan

Key Projects Moving Forward
• POS
• Business Foundation
• HR Systems
POS: Point of Sale

Refresh of Point of Sale & Stock Systems in stores

From To

• 8 hrs to train staff • 4 hrs

• 28 step refund • 4 steps
process • Real time
• Stock position (better waste &
updated overnight stock)

Rollout in 10/11
Business Foundation

Standardises the way we work – SAP

From To

• Inconsistent sales • Better buying with

and margin data accurate data
• Multiple sources of • ‘Single version of
sales and stock data the truth’
• Inconsistent • Controlled promotions
promotion
management
Rollout in 11/12
HR Systems

Refresh of HR Systems in store & Head Office

From To

• Manual processes • Automated processing

• MI can take days • Real time decision
making
• Inaccurate pay
• Accurate pay (hours
automatically
recorded)

Rollout in 11/12
IT Summary

Complex Simple

• Clear plan & resources

• Strong return on investment
• Efficient processes
Restructure supply chain
Efficiency Contract renegotiation

 Fewer trucks

Too many trucks

Lots of manual  Streamlined processes
3PLs paid more
processes  Minimum 3% savings p.a. as costs rise  3PLs paid on results

£150m p.a.

Product handled twice  Product handled once
All Product sent  Product sent direct

100 sites  4 sites via UK hub to country of sale
Warehouse consolidation International supply chain
Delivered to Date
• Strengthened Team
• Corporate Supply Chain strategy
• £30m savings delivered, focused on efficiencies
& contracts:
– 21 warehouses closed
– Renegotiated all contracts
– FSV Freight Club
– Trialled single tier network
– Switched furniture provider
Efficiencies (1)
Loose Loading – Outbound capacity increased 50%

Assisted Picking – Pick accuracy doubled

Efficiencies (2)
Increased Productivity by 15%
Contract Renegotiation
• Foods: GIST (£20m pa by 11/12)
• GM: (£8m pa by 12/13)
– DHL
– Wincanton
– NDL
• Furniture: Wincanton (£5m pa by 10/11)
• International: to do

3PL’s now paid by results

GM Warehouse Consolidation
08/09 5 - 7 yrs
Warehouse Consolidation – next 18 months
• Close more warehouses
• Open Bradford
• Start dedicated Ecommerce warehouse in Midlands
International Supply Chain
• Products sent direct to country of sale
• Consolidate international warehouses
• Efficiency projects
Summary
1 Supply Chain & IT operations is a key part of laying
the foundations
2 We have already delivered benefits
3 We have a plan and a great team to take us forward
Investor Day

13 October 2009
Multi channel

Steve Rowe
M&S Today

M&S International
296 Stores

M&S UK
668 Stores

M&S Direct
By 2020 : The biggest shift in shopping habits
since 1970’s ‘self service’… the influence of ‘direct’
• Direct will influence 60% of GM sales and 11% of Food sales
• Store-only sales will remain flat
• Growth will come through direct/direct to store
General Merchandise Food
Food & Grocery market 2003-2020 split by channel
£250,000 £160,000

£140,000 2.2%
2.2% 09- 20 =
£200,000 09-20 = R 20
20 CAG
CAGR £120,000
Tota
l
Total
£100,000
£150,000 40%
Sales (£m)

Sales (£m)
48% £80,000
89%
£100,000 66% £60,000
93%
38%
96%
34% £40,000
£50,000 8%
24% 4%
£20,000

15% 18% 9%
£0 9% £0

Direct only (£m) Store-to-direct (£m) Direct-to-store (£m) Store only (£m) Buy/reserve for collection in store
Store only (£m) Direct-to-store (£m) Store-to-direct (£m) Direct only (£m) Buy/reserve for collection in store

Source: Verdict, Forrester, Javelin Group

estimates
 Growth opportunity switches from stores to
“direct-affected” sales.
A multi-channel strategy is the only way to maximise this
UK retail splits by channel

£344bn
£307bn +8.0%
£271bn
Sales (£bn)

+10.7% £57bn
£21bn £39bn
+8.9% +4.9% £81bn
£38bn £64bn

£212bn -0.6% +0.2%

£204bn £206bn

Source: Verdict, Forrester, Javelin Group benchmarks and estimates

 M&S Direct today – over 150m visits per year
and growing ahead of the market
Footfall – M&S vs Market* 52 Week Ending Market Share
60% 8%

7%
50%
6%
40%
5%
30% 4%

20% 3%

2%
10%
1%

0% 0%

06-Jan-08

01-Feb-09

29-Mar-09

24-May-09
17-Aug-08
02-Mar-08

27-Apr-08

12-Oct-08

07-Dec-08
Aug-09

22-Jun-08
Mar-09
Apr-09

Jul-09
Feb-09

May-09
Jun-09
Nov-08

Jan-09

Aug-09
Sep-08

Dec-08
Oct-08

M&S Market

* 4 Week Rolling YoY Source: Hitwise/Omniture, TNS

UK Stores/Direct split of sales
GM Food

M&S

Stores Online

Market

Stores Online
Figures are for 08/09
Multi-Channel format development plan
• Short term service and operations
• Mid term evaluation and trials
• Long term aspirations
E-Com/Retail immediate priorities
• Availability
• Service
• Environment
• Cost Management
• Customer Data Management
“Shop your way” – already @10,000 per week

Phone 5%
Online → Home 30%
In-store 29%

Online → store 36%

Website refresh today – inspiring; ease of use
More visible customer ratings

Before After

New ‘Add to Basket’ functionality

Stock information and

‘e-mail when available’
Cost improvement programme

Reduce task

SAVINGS
Managing
Drive
Drive efficiency
Efficiency +
our people
INVESTMENT
Align our
service mode

Task Removal Productivity People

Opportunity Stores
ICOS
Tilling Section Mgr span of control
Till Points
Food Fill Coaches & section
Fitting Rooms
GM Fill co-ordinators
Staff Shops
Backstage
Home Delivery
Trading / Operating Hours
SCOT tills in Finsbury Pavement
What next? Extensive evaluation of options
• Global portfolio and format review
• UK Space and services trials
• Technical developments
• Range extension online
The vision - a seamless multi-channel
customer journey
Customers

M&S Brand
many channels, one brand, consistent service & delivery

In-store Online Phone Media/ Mobile TV

Catalogue
℡ 

Products bought centrally

Merchandised in subsets by channel

Single view of the Customer

accessible across all channels

Pre purchase Purchase Post purchase

Awareness Research Select Transact Receive Contact Feedback
Customer data management – a growth
opportunity M&S Shoppers

2.5m Shop Online with M&S

• Most M&S customers Shop Online elsewhere

8m
do not yet shop M&S
online
• But at least 8m shop
online with competitors,
spending £1bn
21.5m Don’t Shop Online

Source: M&S Card data, FashionTrak, Internal Analysis

Summary
• Multi-channel retail is the way forward
• M&S has a huge opportunity
• Focus on core business foundations
• Deliver on multi-channel short term goals
• Assess/trial options
Investor Day

13 October 2009
M&S International

Clem Constantine
Where are we now
International: £m 2004/5 2008/9 5 year 08/09 % of M&S
(inc Ireland) % change business
Sales 456 898 +97% 10%
Profit 65 116 +78% 15%
Where are we now
International: £m 2004/5 2008/9 5 year 08/09 % of M&S
(inc Ireland) % change business
Sales 456 898 +97% 10%
Profit 65 116 +78% 15%
Where are we now
International: £m 2004/5 2008/9 5 year 08/09 % of M&S
(inc Ireland) % change business
Sales 456 898 +97% 10%
Profit 65 116 +78% 15%
Where are we now
International: £m 2004/5 2008/9 5 year 08/09 % of M&S
(inc Ireland) % change business
Sales 456 898 +97% 10%
Profit 65 116 +78% 15%
Our plan is to grow

Grow
Grow our
our Build
Build
Accelerate
Accelerate Central
Central and
and sustainable
sustainable Continue
Continue to
to
growth
growth with
with Eastern
Eastern businesses
businesses inin explore
explore new
new
franchise
franchise European
European India
India and
and opportunities
opportunities
partners
partners venture
venture China
China

Drive
Drive operational
operational excellence
excellence
 Accelerate growth with our franchise partners
• 19 partners, 26 countries, 197 stores
• 35+ years experience franchising overseas
• Average stores size 10k sq ft
• Franchise sales 30% of total international
• 2 largest partners 48% of franchise sales

Franchise FIBA Al Futtaim

 Grow European joint ventures

Greek Joint Venture Czech Joint Venture

Growing a business in India

• Total population 1.2 billion

Delhi
• 35 million household Mumbai
incomes of >£10k p.a. Kolkata
• 7 key cities population 72m Pune
Hydrabad
• 50 stores in 5 years Chennai
Bengaluru
India – Product, Price, Property

• Product
– Colour
– Styling
– Pack sizes
– Transitional product
– Local sourcing
• Pricing
• Property
Developing a business in China
• Total population 1.3 billion
• Wholly owned
• 3 key regions for growth
• Focus on property, product & local sourcing
Developing a business in China
Explore new opportunities
• Build international food
business
– Ambient, Food to Go,
Fresh & Chilled
– Standalone stores,
store in stores

• Evaluate new markets

Drive operational excellence
• Product
• Pricing
• Property
• Operations
Our plan is to grow

Grow
Grow our
our Build
Build
Accelerate
Accelerate Central
Central and
and sustainable
sustainable Continue
Continue to
to
growth
growth with
with Eastern
Eastern businesses
businesses inin explore
explore new
new
franchise
franchise European
European India
India and
and opportunities
opportunities
partners
partners venture
venture China
China

Drive
Drive operational
operational excellence
excellence
Investor Day

13 October 2009
Q&A
Investor Day

13 October 2009
Foods

John Dixon
32m customers shop at M&S each year
Clothing & Home Food
25m customers 20m customers

Clothing & Home Food

39%
38% 23%

78% of spend

SOURCE: CIU Analysis

1 in 2 households buy food from M&S over the
course of the year

Household Numbers
21.7m
17.7m
16.9m
15.7m
All Continental Discounters 15.7m
12.3m
11.5m
5.9m
SOURCE: TNS
M&S is a secondary top up shop for most
customers
Huge opportunity for us to increase basket size

Regular customer Occasional customer

Customers 20% Customers 80%
80% 20%

REGULAR OCCASIONAL
Once a month
1.5 x a week or less

7 items 4 items

21% Share of Wallet 3% Share of Wallet

M&S Food is famous with its customers for providing
something different to the competition

More
Special

Something
Different

Offering the
Best Quality
Source: Millward Brown
Key actions since last year…
• Pricing adjusted to improve comparative values and
Wise Buy campaign initiated
• Dine In promotions utilised to drive footfall
• Pace stepped up in innovation
• Management team restructured
• Allocation team increased – availability and waste
improved
• Programme of investment in food systems initiated
Grocery Market
M&S holding position; getting closer to market growth
Retailer Sales Growth

Grocery 12we 06th September 2009

Source: TNS
Grocery Market growth driven by price inflation
in most retailers …M&S deflation
Groceries
Removing Price
Inflation
15

10

+5.4%
5

+1.3%
0
Market
& Cont.

Source: TNS SuperPanel Food & Drink (excl Alcohol / Horti) 24 w/e 06Sep09 – M&S adj using internal data
Footage growth in top 8 UK grocers estimated to
grow by c3% in 2009 – ahead of M&S
Space growth by retailer 2009 vs 2008

Source: Verdict & Internal analysis for M&S

Key actions since last year…

• Pricing adjusted to improve comparative values and

Wise Buy campaign initiated
• Dine In promotions utilised to drive footfall
• Pace stepped up in innovation
• Management team restructured
• Allocation team increased – availability and waste
improved
• Programme of investment in food systems initiated
We will increase sales by establishing M&S as
the leading quality food retailer
Giving our customers…

The most
convenient product
& locations
The best quality Leading innovation

Our mission is to provide the best quality food at

First class
great value, continually innovating and setting the service
standards for UK food retailing

Great value The right

Trusted and safe product range
We will deliver our vision and increase share of
grocery spend through improving…

Innovation & Range

Price & Promotion

Customer Service & Availability

Access to the Brand

Innovation & Range
• Programme of constant and genuine innovation planned,
setting the benchmark for the food industry
• Target 25% of catalogue delivering genuine newness
every year beginning this year
• Credible range to cover all regular grocery shopping
needs
• Range innovation throughout the chain and catalogue
optimised by format
Innovation & Range
The leading drivers to rejuvenate our innovation agenda

Wellness and Health The best of Restaurant, Delicatessen

& Home Cooking solutions

Events and Entertaining Destination Categories

Innovation & Range

• A credible range to increase share of

regular customers’ spend
• Breadth not depth through edited choice
• Add 800 lines including edited range of
grocery brands
• Inclusion of top brands will increase
customer choice and highlight M&S value
Innovation & Range
Innovation and effective We will deliver planograms for all
ranging has to be visible categories and enforce in store
across all formats to implementation
deliver for the customer To

•Ranging team created

•Tactical ranging system
solution 2009/10
• Full solution including
space planning and
display by 2010/11
Target 2011 implementation
Price
Prices at values that make LFL basket price comparison with
sense to the customer versus other grocers
Retailer % Variance From Survey Average
the competition
15%

•Price position improved – Price

investment
program started
cheaper than Waitrose 10%

•08/09 M&S deflationary in 5%

inflationary grocery market

0%
•Ensuring adequate range
of entry price point product -5%

– not “value tier”

M&S Sainsbury's Tesco Waitrose

Source: Retail Map
Price
Wise Buys communicate price message without
compromising quality
Promotions
Key to ensuring customers recognise our value and spend
more …opportunity to increase M&S basket
% of product sold on promotion now Dine In menu promotion strong
in line with market appeal for all customer types

Source TNS World Panel Grocery

Promotions
Focus on improving promotions
•New central team
•Reducing number of mechanics
•Targeting appropriate
promotions by product type
•Enhanced analysis &
improved profitability
•Greater understanding of
customer behaviour
Customer Service

Customer service
proposition to match the
quality of our food

•Availability
•Inspiring store environment
•Innovative in-store facilities
Customer Service
Opportunity through system investment to significantly
improve availability…and sales & profit
Background
•Legacy systems constraining ability to react & effectively manage
end to end supply chain and expanded store portfolio
To date
•Merchandising team restructured to deliver improved availability
Future
•Industry leading allocation systems and supply chain – availability
at UK industry standards of > 96% – 3 year target
Access to the brand
• M&S food convenient for the M&S food market share
customer whether at home, 08/09
at work or travelling
• Aim to be within 10 minutes
drive of most potential
customers – currently still
only 51%
• Car parking wherever possible
– all new stores other than
high traffic city/travel locations
• In future, on-line Food to
Home & International
>7.7% 4.3-7.7% <4.3%
Access to the Brand
There remain significant conurbations where we are under
represented and can grow market share
Strong city: Edinburgh Weak city: Sheffield

Food market size £1460m Food market size £1240m

M&S food sales £103m M&S food sales £37m
M&S food share 7.1% M&S food share 3.0%
(was 4% in 2002)
Access points to M&S food 4
Access points to M&S food 8+3 BP
Access to the Brand
Expansion can be delivered through main chain food halls
and Simply Food stores
Main Chain
Out of town with parking
- Relocations from High Streets
- New locations

Simply Food
Edge of town with parking 7 – 12k sq ft
Small convenience stores only in urban/travel locations

Simply Food Franchised

Further extension of forecourts with BP
Extension of successful hospital trial
Completion of rail/motorway opportunity
Summary
• Progress made over the past year
• Clear plan in place
• Better values, innovation and availability being delivered
• Credible range identified to target more of a main shop
• Stronger management team in place
• Short term focus balanced with longer term vision
Investor Day

13 October 2009
GM Strategy

Kate Bostock
Scott Fyfe
Current Environment – General Merchandise
• Our performance
• Market share
• Operational efficiencies
Mission statement

World leading quality retailer, providing

aspirational clothing, home products
and services to our customers, any
time, anywhere.
Our plan
Market
Broad
Share
customer Opportunities
base
Improving
operational Brand
efficiencies segmentation
M&S
Customer
New Quality and
markets innovation

Multi- Price
channel architecture
Market share opportunities

52 we Aug 09 52 we Aug 09
Market Share of Clothing and Footwear
Value Volume
10.7 11.2
6.2 4.9
5.4 3.3
4.2 2.3
3.9 9.5
3.2 2.7
3.1 10.1
3.0 8.9
2.6 4.8
1.9 2.2
0.7 0.3
Source: TNS
Market share growth opportunities
Womenswear
Market share growth opportunities
Menswear
Market share growth opportunities
Lingerie
Market share growth opportunities
Kidswear
Market share growth opportunities
Our mission is to grow Homeware
Share 2009 #1 Towels
7.9%
5.6%
4.9% Plain dye bedding
#4
4.5% 6.1%

4.1%
#10 Kitchen
4.1% 1.7%
3.5%
3.4% #11 Home accessories
3.2% 1.3%

2.8% #12 Soft furnishings

0.8%
2.3%
Source: Verdict – Homeware and Furniture retailers 2009
Brand segmentation
Our customer
Brand segmentation
Our sub brands

WOMENS LINGERIE MENS KIDS HOME

Life-
style
Older
customer

Younger
customer
Brand segmentation
• Drive sub brand to complement core M&S brand
• Segmentation of offer by lifestyle as well as customer
profile/age
• Improved ease of customer navigation in store
• Drive growth of market share
Broad and competitive price architecture

Good Better Best

Belted Mac Shawl Collar Belted Wrap Coat ¾ Sleeve Bow Tie Neck Coat
Polycotton Poly wool mix 100% Cashmere
£35 £69 £199
Develop multi-channel offer
New markets and opportunities
GM Operational
Efficiencies
Scott Fyfe
Commercial & Operations
Director, GM
Our plan
• Improved stock management
• Less duplication and better cataloguing
• Improved availability
• Better sourcing
Our plan
Availability
• New stock and allocation systems
• Improved logistics network
• Multi channel
Our sourcing
Europe & North 40-45%
Africa Region
15-20% Far East Region
• Fashion • Innovation
• Fast response • Embellishment
• Added value product • Values
• Using indigenous fabric base • Skills base

South Asia & South

Africa Region 35-40%
• Core Basics
• Values
• Embellishment
• Duty & quota benefit
Our ethical sourcing
Our ethical sourcing
Summary
• Market Share growth opportunities
• Brand segmentation
• Broad and competitive price architecture
• Develop multi-channel offer
• New markets and opportunities
• Improving operational efficiencies
Investor Day

13 October 2009
Q&A
Investor Day

13 October 2009
Investor Day

13 October 2009