M&S revisits plans for online food store

LONDON - Marks & Spencer is looking to launch an online food shopping service, nearly 10 years after rivals such as Tesco, Asda and Ocado started internet ventures.

The news comes as M&S announced a number of new initiatives both in-store and online, such as expanding its international delivery service.

Today the company is running an investor day and showcasing new plans at a trial store in west London.

M&S has previously looked at selling food online but has been put off by the logistical challenges involved in setting up an operation.

This time the comments came from the store's director of retail Steve Rowe at a meeting with analysts who said the retailer wanted to take food online but had been concerned about the distribution costs and the limited size of its range.

Rowe said: "What I can't say now is exactly how or when we will choose to do that."

If M&S's online food plans go ahead it is likely it will sell other brands' goods in addition to its own-brand range.

The store knows customers will need a multitude of products that M&S does not supply if they are doing their weekly online shop.

It is not the first time M&S has mooted the idea of launching an online food service. In April last year M&S commercial director for food Jim Waller discussed the idea of launching such a venture with another partner.

The problem for M&S is that if it followed the online model of Tesco and Asda it would need to hold all of its products in-store rather than at a distribution centre.

Around the turn of the millennium, the supermarkets realised the best way to supply online food was from actual stores rather than distribution centres. This was especially costly for Asda, which was forced to close two distribution centres in 2002.

The only online supermarket brand that still uses distribution centres is Ocado, whose reach, until recently, was largely limited to the M25 area. Now the store claims to reach 67% of the country but the bulk of its orders are still confined to the London area.

While M&S mulls over the prospect of selling food online, its non-food service goes from strength to strength.

In addition to expanding its international delivery M&S announced online clothing sales for the six months to the end of September had increased 47%.