In this report we assess whether an M&S Simply Food convenience store would be profitable when located in Complex Desjardins, Montreal. In the U.K. Simply Food possess a strong brand image and wide-variety of products that emphasize quality. Although considered more expensive than competing stores To see if the chain will have the same level of success in Montreal, we first analyzed the fundamentals and competitive landscape of the industry. Once a gap in the market was identified, we used quantitative research practices to examine each of the marketing mix factors involved in establishing the store. Our findings will indicate whether the location and consumer pool under ...view middle of the document...
In this stage of our research we were able to apply more formal approaches, such as conducting in-depth interviews with store managers. After all the necessary information was acquired, a qualitative comparison of the industries was made to determine whether opportunities existed for M&S Simply Food in Montreal and whether a repositioning of products would be needed.
From our previous analysis we establish a target market: consumers at the Complex Desjardins. This location is one of the main attractions in Montreal, at a vast 4 million square feet. Roughly 30,000 people come to the complex and its surroundings daily to work, shop, eat and/or enjoy the activities surrounding the Central Square. The Central Square inside the building has a surface of 15,000 square feet and is surrounded by a commercial gallery of 100 stores and restaurants. Thus, this location was chosen because of its notoriety and large exposure to residents and tourists.
Survey and Sample Size
To determine whether consumers at Complex Desjardins would be willing to purchase M&S Simple Food products we conducted an anonymous survey on food services within the complex. The survey was a questionnaire made up variety of formats designed to draw out information about the location, demographic, consumer preferences, surrounding competition, pricing comparisons and consumers’ willingness to pay.
Interviews were conducted at the Complex Desjardins, as well as within a 500m radius of its surroundings which comprised of Complexe Guy-Favreau, Bleury Street, Place Des Arts and Boulevard Saint-Laurent. We classified qualified respondents as consumers that came through the complex at least 3 times a week. In total, we interviewed 96 people, considering a variability of 50% and a 10% acceptable sampling error at 95% level of confidence. Assuming the total population under observation here is 30,000, it is evident that a 5% confidence interval is well above 96. Thus, no more readjustments are needed due to small sampling size.
(1) U.K. Industry
The U.K. convenience store market was valued at £30.9 billion in the 12 months to April 2010, representing a 6.3% increase on the previous year. The value of the market continued to grow despite a 0.5% in store numbers. With the total U.K. Food and Grocery market expanding at a slower rate of 4.1% in the same period, it is evident that the convenience sector is accelerating at a faster pace than the overall market. Thus, its market share has risen to 20.5%.
The factors driving the sector are the rising number of single person households, a growing population, increasing number of women in the work place and longer working weeks. The sector is also propelled forward by improved operational standards, greater awareness of shopper trends and more modern, tailored convenience solutions.
(2) M&S Simply Food Positioning
The convenience sector is highly fragmented, with...