Over the last three years, we’ve undertaken one of the biggest store investment programmes within the UK retail sector. We are focused on increasing the number of stores we have; expanding and modernising our existing footage; and ensuring we offer our customers the right stores in the right locations.

In order to achieve this, in November 2007 we announced that we are expanding our space by 15% to 20% in the next three to four years. We will also complete the modernisation of our remaining store portfolio in the next few years.

A bigger and better M&S

During 2007/08, we increased our total space through new openings and extensions by 815,000 sq ft, or 4.8%. We opened more than 100 new stores in the UK, ranging from a large high street store at 66,000 sq ft, to Simply Food stores of around 7,000 sq ft.

We’ve made good progress against the strategy we laid out in 2006, and in the year ahead we plan to accelerate our expansion, increasing our space by a further 5.5% in 2008/09, by moving ahead on five fronts:

	Expanding and modernising our city centre stores – in 2007/08 this included Edinburgh and Belfast and in 2008/09 we will modernise our Cardiff store.
	Opening bigger out-of-town and flagship stores of over 100,000 sq ft and expanding our space where we already trade – we extended London Colney and Lisburn in 2007/08 and in 2008/09 we opened a new store in Colliers Wood, with White City and Brooklands to open later in the year.
	Creating a better presence in retail parks – we opened seven stores in 2007/08 including Preston, Kinnaird Park and Silverlink and have several more in the pipeline including Swindon Orbital and Malvern.
	Examining our portfolio of high street stores to ensure they are the right size and in the right place – for example in 2007/08 we doubled the size of the Eltham store in London and relocated in Derby and High Wycombe. In 2008/09 we will open in Luton and take two stores down to one in Worcester.
	Building on the success of Simply Food (see below).

Store modernisation

We have always acknowledged that stores were in need of refurbishment, particularly those which have been in our portfolio for many years. This is important in not only helping our stores run more efficiently, but in ensuring they are bright and contemporary, with easy-to-shop food halls and, to complete the experience, a range of hospitality options.

In 2007/08 we completed work on 86 stores, (excluding franchise openings), relaunching about 5 million sq ft. This means that 70% of all our space is now in the new improved format. Inevitably the work caused some disruption in stores, but trading generally held up well, with the new format stores out-performing non-modernised stores. Our target is to modernise the remaining 30% in the next few years, with 10% planned in 2008/09.

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