Chief Executive's
overview Marc Bolland

In a difficult marketplace M&S performed well, with sales up 1.3%. Our Food business delivered an excellent performance, as we strengthened our position as a specialist retailer and benefited from customers' ongoing trust in our provenance and innovation. Our GM performance was unsatisfactory but we took action and have set out a clear plan for improvement. Our International business performed well and M& delivered strong growth.

We continued to steer the business through the challenges of today's market, remaining focused on our plan to transform M&S from a traditional British retailer into a leading international multi-channel retailer. At the end of the second year of our plan, this strategy remains as, if not more, relevant. Over the last 12 months, we have driven our plan with real momentum.

General Merchandise

Clothing sales were not satisfactory this year and we took decisive action to improve performance. A new team was appointed to manage the business under John Dixon's leadership, supported by Belinda Earl in the newly created role of Style Director.

Having improved our operational execution and stock management, our customers benefited from better availability. In a highly promotional market, our tactical offers on selected products were well-received.

We have a clear plan to address our performance, with a renewed commitment to quality and style. These improvements are reflected in our upcoming Autumn/Winter collections and our progress will continue step by step.


Our Food business delivered a strong performance throughout the year, up 3.9%. Like-for-like sales were consistently ahead of the market, driven by our trusted quality, provenance and ongoing innovation, which saw us refresh 25% of our entire range. M&S remains the destination of choice for special occasion food. Customers put M&S food at the heart of their celebrations, resulting in a record Christmas and our best ever Easter performance.

The launch of our Simply M&S range, coupled with our well-targeted offers, helped value conscious customers do more of their regular shop with M&S. Greater employee 'ownership' of zones in our Food Halls enhanced customer service and our improvements to space, range and display delivered better on-shelf availability.


Our new store concept has now been implemented in over two-thirds of our stores – giving customers a clearer, more inspirational in-store environment. This year we started the second phase of our store transformation – which included the roll-out of our new M&S Beauty and Home concepts.

Focus on UK

Both departments performed very well and feature the latest in multi-channel thinking – driving customer engagement and increased sales. In August 2012, we opened our flagship store at Cheshire Oaks, which brought together all the elements of our new store format under one roof for the first time.


M& sales accelerated this year and grew ahead of the market at 16.6%. Through a combination of better site navigation, more style advice and greater choice, we increased weekly visitors to 3.6 million. We further improved our popular Shop Your Way option, with free next day delivery to stores and provided customers with more inspiration and choice through the introduction of new in-store technologies. We also launched several brand new ways to shop with M&S, including our first ever transactional iPhone app.


International sales were up 4.5% this year. We saw double digit growth in our priority markets but experienced more challenging conditions in our legacy European markets. We expanded our presence with a multi-channel approach, opening 45 stores and putting M&S online locally in a total of ten territories, following the launch of new websites. Enhanced visual merchandising in our stores improved the clarity and consistency of the M&S brand and we made a number of improvements to our international operations. We also strengthened our franchise relationships and provided additional marketing support to our partners.


Our brand is one of our strongest assets and our advertising campaigns reflect how we are in touch with our customers' changing needs. This year, we used a selection of models representing a range of ages and sizes; better reflecting our customer base and showing our customers how to wear the season's key looks. Towards the end of the year, our Perfectly campaign featured an edited collection of iconic products from our womenswear range. We bought with confidence into these advertised lines and sales increased as a result.

Our recently launched Make Today Delicious campaign encourages customers to make every food moment special with our innovative, quality food.

Plan A

We believe our customers are the driving force for change and over five million customers participated in Plan A activities this year. We stepped up our efforts to engage them in more sustainable living through a range of initiatives including Shwopping, which has already helped divert 3.8 million garments from landfill, and our Big Beach Clean-Up. Our five year anniversary in 2012 marked a major milestone in our journey but we have renewed our efforts to fulfil and exceed our own commitments. We also worked to extend our influence and share our learning beyond M&S – to our customers, suppliers and the wider industry.

Transforming our business

To fulfil our international, multi-channel ambitions, it is essential we have the infrastructure and organisational capabilities to drive this growth. Since we launched our plan to transform M&S, we have made considerable progress. We now have a stronger organisational structure and a rich pool of talent across the business. As Alan Stewart explains in the Financial Review, we have significantly enhanced our supply chain operations with the opening of our first dedicated e-commerce distribution centre at Castle Donington. We have also made good progress with our systems upgrades and our new multi-channel platform build is on schedule for launch next spring.

Marc Bolland's signature

Marc Bolland Chief Executive

Looking ahead

The market will remain challenging for the foreseeable future and we expect consumer spending to remain cautious and carefully planned. However, our attention to delivering exceptional quality and marketleading innovation means we are well positioned to navigate through the short term.

We remain fully committed to the delivery of our plan; ensuring that as we evolve we remain in touch with our customers so that we can anticipate and respond to their changing needs.

Our transformation of M&S into a leading multi-channel retailer will be supported by the creation of stronger, more agile infrastructure – building a robust platform for our long-term growth.