Marks & Spencer will accelerate its plans to slash the number of its larger stores that sell clothing and homeware products.
In an update to investors on Wednesday, the supermarket revealed it would shutter more than one in four of its so-called full-line stores within three years rather than five.
Plans also include the opening of more than 100 new food shops, while 67 “lower productivity” full-line stores would be closed.
The retailer has previously outlined plans to cut its total number of hybrid stores to 180, from a total of 247 at the moment.
Floor space allocated to clothing and home would be reduced 20 per cent while capacity for food would be boosted by between 10 and 15 per cent.
An acceleration of the “store rotation” scheme comes as more M&S shoppers have been buying clothing and homeware online, with digital sales hoped to reach 50 per cent of sales.
M&S acknowledged it was facing “significant cost headwinds,” as the country grapples with historically high levels of inflation.
Cost pressures include a seven per cent increase in staff wages. It forecast “further pressure” from wage inflation in 2023.
Energy price increases have left the retailer with a bill £40m higher than anticipated, with the retailer warning it could possibly suffer a headwind of more than £100m over the next year without government intervention .
It warned that it was feeling pressure from price increases for food costs while it expected pressure in clothing costs ahead due to the crash in the pound against the dollar.
Value was “becoming customers’ top priority,” the firm said, as households struggle with increases in bills across the board.
As a “potential winter of discontent” looms for the economy, the strategy to expand Simply Food stores “makes sense” for M&S, Sarah Riding, retail and supply chain partner at law firm Gowling WLG, told CityA.M.
The supermarket’s grocery arm has continued to gobble up market share this year, beating rivals including Waitrose.
“By opening stores outside of city centres in areas such as retail parks, greater footfall can be attracted with increased basket spending to maximise revenue and help mitigate the potential challenges ahead,” Riding added.