Expats say M&S needs to get the price right to succeed in France

by Ray Clancy on April 5, 2011

The price must be right for M&S in France

Expats in France are eagerly awaiting the launch of landmark British retailer Marks & Spencer in Paris later this years 10 years after the company quit the French capital.

They are warning the retailer though, that has been struggling to increase sales in the UK, the prices will have to be right to attract them into the new store on the iconic Champs Elysees and buy from the Internet.

‘If prices are too high I won’t bother. I can buy shortbread in my local supermarket,’ said Antonia Williams who lives in Paris.

Mark Stevenson, an American living in Paris, agreed. ‘We are all much more price conscious. The markets here provide a good deal in terms of price and quality. I do like their shirts though,’ he explained.

Britain’s biggest clothing retailer, which also sells home wares and upmarket foods, said it would open its 15,000 square foot store in time for Christmas. It is also in talks with UK franchise partner SSP about opening a number of Simply Food stores in and around Paris, and looking for a limited number of locations from which to sell a larger clothing and food offer.

It will launch its first international transactional website as well. Customers in Europe can currently order from the UK website and most orders are delivered for a standard charge of €10. The new French site will be in French and Euros.

The main M&S store on the Champs Elysees will extend to three floors and sell women’s wear, lingerie and food, taking over a site occupied by the Esprit clothing chain. M&S executives are hoping that the group’s return to France will receive a more positive response than its exit. In 2001, trade unions demonstrated against the closure or sale of 18 stores in France, with the loss of 1,650 jobs, plus a further 20 stores in Germany, Spain, Portugal and the Benelux countries.

‘Over the past ten years the number of demands from people for us to come back has been enormous. Our company has changed in a positive way and France has moved on as well. We want to come back in an extremely positive way,’ said Marc Bolland, M&S chief executive.

John Dixon, head of food at M&S who also had a senior role in the former French business, said the Simply Food stores would be stocked with British staples.

‘You are going to see things like Scottish shortbread, Scottish smoked salmon, our fabulous tea. Those were the products that really stood us apart from everybody else in the market here,’ said Dixon.

Expats say though they can already buy many of these items in French supermarkets. ‘The price of Scottish smoked salmon is cheaper here in Leclerc than it is in M&S. So why would I go out of my way to shop in M&S?’ said Claire Stein, who also lives in Paris.

The top five items at the former M&S store on Boulevard Haussmann reflected a love of British basics: marmalade, tea, pancakes, fleur-de-lis toilet paper, and muffins.

M&S believes though that its market research shows a demand. The group said seven out of 10 people questioned for a survey were aware of the brand, with the 100 Champs Elysées address a prime position for luring in Parisian shoppers.

M&S, which has more than 600 shops in Britain, has been expanding abroad aggressively in recent years, with new outlets in India, Dubai and China. It plans to generate up to a fifth of sales overseas.

Bolland would not be drawn on further European expansion plans but said the French strategy of targeting a major city with stores and covering the rest of the country with a website could be replicated elsewhere. M&S’s European operations include stores in Greece, Poland and the Czech Republic. ‘We will use that blueprint for other countries we might enter,’ he said.

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