Profitero takes a look at some of the key business strategies and technological advances in the Waitrose business in recent years.
Waitrose co-founders Wallace Waite, Arthur Rose and David Taylor opened their first small grocery shop at 263 Acton Hill, West London in 1904. The John Lewis Partnership acquired the grocery business in 1937, opening the first Waitrose supermarket in 1955. Fast forward 108 years from that store opening in West London: the company now runs 269 stores in the UK, exports to more than 30 countries and employs over 37,000 people.
The upmarket retailer now has a UK market share of about 4.5 per cent. The branches range from high streets stores to suburban premises; they vary in size from just 7,000 square feet to approximately 56,000 feet.
Here, Profitero takes a look at some key developments at Waitrose in recent years:
Retail Director Rob Collins:
Waitrose appointed Rob Collins to the role of Retail Director in January 2012. Collins took over the position from Tony Solomons, who retired from the business. Collins previously held the position of personnel director of the supermarket chain. As well as managing the retail operations of the 269 stores in the UK, he has responsibility for Waitrose e-commerce, convenience and hospitality offers.
First dotcom store:
UK grocer Waitrose, led by Mark Price, launched its first Dotcom Fulfilment Centre in West London last winter. The company began offering online shopping in London last July with orders being met by 19 branches in the capital. The Action-based 37,000 sq ft Dotcom Fulfilment Centre – also known as a “dark store” – looks like a supermarket but with Waitrose employees picking products from shelves, chillers, freezers, bakery and dedicated “service counter” areas for six orders at a time. Working in parallel with the site, fourteen Waitrose branches continue to deliver orders for customers in certain parts of the city. “We see huge potential for our online business across the country and in the important London market,” said Mark Price, managing director of Waitrose.
Extending The Tesco Price Match Guarantee:
At the start of the summer, Waitrose announced plans to extend its price match guarantee with Tesco. Waitrose had been matching prices against the market leader on 1,000 branded lines for over eighteen months. The retailer stated it was adding 7,000 products to the price match guarantee. Waitrose managing director Mark Price commented, “I am pleased to tell you that our prices on branded grocery products are now identical to Tesco’s, excluding promotions. There are no gimmicks, no coupons to redeem against a later shop, and no need to check your receipt online. We simply match the prices on the shelf, so you benefit immediately.” With so many UK supermarkets now using competitor price monitoring technology to keep up to speed on rival pricing, it is not surprising that Waitrose is extending its price match guarantee with its rival.
Exports to Japan:
Waitrose has enjoyed huge growth in its exports to Japan recently. The retailer has announced that exports to Japan rose by a third from January to June this year. Its main clients in the country are the Peacock Stores and Seicomart supermarket chains. Popular items include traditional British baked beans, biscuits and tea. Waitrose now exports to more than 30 countries.
Contract with Ocado:
The retailer has a contract with online grocer Ocado to deliver Waitrose food to British households. Ocado has delivered over twenty seven million orders since its launch in 2002. “Competition in the online grocery sector is as strong as the traditional store-based sector, and will almost certainly increase,” said Tim Steiner, CEO of Ocado last December.
Introducing Indian wine to the UK:
In the second half of last year, Waitrose increased the persity of its wine range by introducing two brands of Indian wine; the two wines are made from grapes grown in the Maharashtra region of Western India. “I’ve been looking at Indian wines for four to five years,” revealed Matt Smith, wine buyer for Waitrose. The upmarket retailer has already introduced wine from other unusual wine-producing countries (e.g. Croatia, Lebanon and Morocco) as part of the Waitrose World of Wine Showcase.
Launched in 1990 by HRH The Prince of Wales, the Duchy Originals brand of organic food is produced on the Duchy Home Farm – part of the Highgrove estate. The Duchy Originals from Waitrose product range arrived in Waitrose branches in August 2010; the brand is licensed exclusively to the retailer and has proved very popular with customers.
Branching into fashion:
The retailer’s Canary Wharf store was the first store to be branded ‘Waitrose Food, Fashion & Home’. Its second floor offers menwear, women’s fashion, beauty products, accessories, travel goods, sportswear and electronic goods. The “exciting and innovative new shop” brings together a host of new ranges and features over three stores,” said the company.
New IT Director:
Last month, Waitrose announced the appointment of Cheryl Millington as its new IT Director and a member of the Waitrose Management Board. She succeeded Kevin Berry, who retired earlier this month following a 35-year career in the John Lewis Partnership. Since 2009 she has been chief information officer at Asda, responsible for the delivery and implementation of all Asda’s technology projects. She was also a member of Walmart’s Global IT Executive Board. “Effective use of IT is already of massive importance to our business and will become ever more so as we grow and as technology opens up new possibilities,” said Mark Price, managing director of Waitrose. “Cheryl is incredibly well qualified to lead us in this.”
Waitrose introduced its gluten-free range in 2009; gluten free almond tarts, gluten free cherry bakewells and gluten free double chocolate muffins are just some of the items in the product range for special diets.
The Little Waitrose model has been welcomed by shoppers and town councils. Waitrose will opened its latest Little Waitrose store in Muswell Hill, London on July 3. Praised by UK Deputy Prime Minister Nick Clegg, the John Lewis Partnership retail model allows store employees to become co-owners of the business. They provide input on how the store is run. Employees receive an annual share of profits. In 2011, all partners received a bonus equivalent to 18 per cent of their annual bonus.
Own-label beauty products:
In February of this year, Waitrose confirmed that it was ending the trial of Boots products in 13 of its stores; the products were replaced by its existing own-label or branded products. However, Waitrose products are still being sold in Boots, and existing Boots pharmacies will continue to operate in Waitrose stores.
This range brings traditional and cheaper cuts of meat back to the dinner table. Last winter, Waitrose expanded the range to include lamb and veal offal. “Customers are learning to love these cuts again,” said a spokesperson for the company.
Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email firstname.lastname@example.org