M&S to provide sandwiches and hot food for Costa Coffee | Marks & Spencer

Marks & Spencer is to provide sandwiches and hot food to more than 2,500 Costa Coffee outlets as the high street stalwart seeks new ways to reach commuters now working from home.

The retailer said it would be providing more than 30 different items to Costa including children’s food, hot meal boxes and salads under the collaboration with the UK’s biggest coffee shop chain.

M&S said the partnership with the coffee shop, which was bought by Coca-Cola in 2018, would help it reach neighbourhood locations, drive-throughs, high streets and retail parks.

The deal is M&S’s latest effort to widen the distribution of its food after it bought a share in Ocado’s retail arm and replaced Waitrose as the online grocery specialist’s main partner. The deal with Ocado resulted in M&S being able to begin selling groceries online for home delivery for the first time just over a year ago.

M&S has also tested its Simply Food convenience store outlets in WH Smith stores and provided food for some British Airways flights for about three years ending in 2020.

Meanwhile, M&S has been revamping its stores and products to appeal more to families, helping the group return to a pre-tax profit in the six months to October after a loss of almost £88m during the same period in 2020.

The strong performance reflected a 10% jump in food sales as well as “substantial improvement” across its once struggling clothing and homeware business.

Stuart Machin, the managing director of M&S’s food division, said: “Bringing together delicious, great quality M&S food and the nation’s largest chain of coffee shops is great for customers as it extends our reach and supports our strategy of making M&S more relevant, more often for families.”

Analysts said the tie-up could be good for both parties with M&S benefiting from extra sales while the higher volumes would lift its profit margins. Costa has the chance to extend the variety food it offers, particularly on healthy eating and new trends such as plant-based foods in which M&S has already developed full ranges.

Bryan Roberts, a retail analyst at Shopfloor Insights, said retailers were looking at new ways to sell their products in local neighbourhoods as trips to city centres had reduced during the pandemic: “Lifestyles are changing with the shift to working from home and Costa needs to raise its game on food and M&S has the brand name and credentials [to help it do that].”

Neil Lake, the managing director of Costa Coffee’s UK and Irish division, said: “This collaboration with M&S … will build on our existing food range and help us fulfil our ambition to become the first choice for customers buying food and coffee on-the-go.”