M&S on your doorstep

MARKS & Spencer is considering launching a full food and grocery home delivery service in an effort to catch up with its supermarket rivals and revive its flagging food sales.

No final decisions have yet been made but chief executive Stuart Rose said: 'It's on our radar screen. It's the sort of service customers expect from Marks & Spencer in the 21st century.'

At the moment, the group offers only a limited home delivery on the foods side, with Christmas hampers, celebration chocolates and wine. It has just launched an 'event hampers' service with picnic hampers delivered to customers at concert venues.

M&S recently signed up Amazon to develop and run its internet operation in an admission that it has lagged behind retail rivals in the fast-growing online market.

Rose, who has been in the M&S hot seat for just over a year, has repeatedly said the group should be judged 'on the quality' of its sales. But growth in its online operation could play an important part in the revival of the group.

Speaking as the M&S annual report was mailed out to the company's 350,000 shareholders, Rose reaffirmed his confidence in the group's recovery. Trading remains tough, but he said: 'It's not a question of if we can do it, but a question of when we can do it.'

He believes the perception of M&S as overpriced is at last beginning to change and says customers are responding well to the new product lines and the new-look stores.

'When I was going round the stores last year, I was getting a lot of fingerwagging from customers. But now they're saying 'I can see that you are trying'.

The annual report details the huge cost of the boardroom clearout over the past year, pushing the total bill, including salaries, pay-offs and signingon fees, up from £4.5m to £9.7m.

As previously disclosed, there was a raft of compensation payments for ousted directors, including £731,000 for former Selfridges boss Vittorio Radice, who was behind the disastrous Lifestore, and an £847,000 pay-off for former chief executive Roger Holmes.

The group is also launching a new bonus scheme for its top 400 employees and a new performance-share plan for its 100 most senior executives. Bonuses of 60% of salary will be paid if certain targets are achieved but could rise to 150% if those targets are exceeded.

Targets have not been disclosed but M&S said they would be based on profit before tax for the 2005-6 year and would be 'demanding'. The focus on current-year profit is aimed at 'concentrating executives minds' on the short-term recovery of the group.

Rose, who did not receive a bonus last year, would be in line for £1.3m on top of his £850,000 salary if the group smashes its performance targets. But he and other directors would be required to defer 50% of this into shares that would have to be held for a minimum of three years.