M&S says its supply chain reform project will cut distribution costs as it prepares for a full home shopping service on food. M&S already has a boardroom lunch delivery service, and admits selling food online is a gap it plans to plug. A spokeswoman added: "With a small own brand offer we can't compete with Tesco, and online food is not imminent. But we have it in mind." Experts estimate M&S is spending millions on its market leading project to phase out barcodes after persuading over 400 suppliers to adopt radio frequency tagging. It is recycling 3.5 million crates for fresh, chilled and ambient foods into RFID tagged crates in a project which will run alongside a general upgrade of supply chain and delivery equipment. M&S food logistics planner Jo Mindenhall said: "We are introducing the new crates by category along with new storage pallets. There will be a three-year changeover period where we operate both systems beginning before Christmas this year." Tags which can cut the time taken to read a pallet-load by 80% cost 50p each, so total cost is £1.75m. M&S will also install fixed and portable scanners in all stores, as well as its six depots. Industry experts estimate that at a cost of up to £5,000 a site for RFID hardware alone, the bill for installation costs will be well over £2m. And some 400 suppliers are also installing RFID reading equipment, footing a bill of around £2m between them. A source said: "The total costs of the new systems will be at least £5m." {{NEWS }}

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