Growth in the UK grocery market has been hard to come by for most this summer, as Kantar Worldpanel data published today explains, but one supermarket that can be satisfied with its performance of late is Waitrose.
The Berkshire-based business saw trading grow 8.9 per cent during the 12 weeks to September 4th 2011 according to Kantar, and having already posted an impressive 8.7 per cent annual sales rise for the first half of this year, it is confident of further progress as the year moves on.
German discounters Aldi and Lidl have also grown sales significantly during that time, prompting the notion that there is a growing divide between comfortable and the cash-strapped consumers in the UK, although it is a concept Waitrose Managing Director Mark Price strongly refutes.
“You can get into the ‘two nations’ debate but I’m not sure that’s right,” he told Retail Gazette.
“If that was the case other retailers would be doing very well. I personally think it’s about customers weighing up where they get the best value for the money.”
Waitrose last week gave a strong indication that its offer will soon be extending to far more than food when it reopened its largest UK store in London’s Canary Wharf, complete with one floor of groceries, another stocked with homewares and a top level dedicated to fashion items.
The company understands that if it is to keep chasing the tail of the top four supermarkets, Tesco, Asda, Sainsbury’s and Morrisons, it will need to follow their lead in expanding non-food ranges and developing its own lines away from grocery without losing focus on its core business area.
“First and foremost Waitrose is the best food retailer in the UK but what we recognise is that when people come to the supermarket they do want to buy other items such a kettles and socks,” the MD explained.
“So what we want to do is offer that in terms of a Waitrose branch not at the expense of cutting back on food.”
Utilising the strong relationship it has with sister organisation John Lewis - the non-food products are sourced from the department store group - Waitrose’s Canary Wharf store shows how it can provide customers with an extended range of goods.
Of course the grocer has already dipped its toe into non-food goods by offering traditional cleaning and tablewear products that shoppers expect to see stocked in their local supermarket, but there is a feeling that it could soon knee deep in the sector.
Supply Chain Director David Jones suggested that a Waitrose-own fashion line may be on the agenda, following on from the initial success of Tesco’s F&F clothing, Asda George and Sainsbury’s TU ranges, although there are other areas of potential development also under consideration.
“We want to be great at dining items and other non-food areas,” Price remarked.
“I would expect us to do more in health & beauty, childrenswear and toys too; products like that are right for Waitrose as we build our product range.”
While expansion of non-food divisions among the grocery elite appears to be accelerating faster than it takes to eat a Waitrose Lemon Yum Yum, with Morrisons among the latest grocers to announce grand plans for this arm of its business, developing convenience in shopping is also on all supermarkets’ agendas.
Yesterday the supermarket announced a new partnership with fuel company Shell to operate convenience outlets at the 20 or so of its petrol forecourts in London under the banner of Little Waitrose.
Having opened the first Little Waitrose in west London at the turn of the year and after trialling the concept in other parts of the UK since, Price is confident that he has found a format that suits its increasing number of on-the-go customers.
In July, the self-styled ‘chubby grocer’ spoke about “improving accessibility” for the people who want to shop at Waitrose, and the smaller-sized stores are expected to play a major role in providing this service.
He previously targeted opening 20 Little Waitrose convenience shops by the end of 2012, but following the Shell deal there now appears to be scope for even more of these outlets nationwide.
“We will have another 20 to 30 Little Waitrose shops by this time next year nationwide,” Price stated.
“There will be a lot of focus on London but they will appear all over the UK.”
The Waitrose boss sees no reason why his business cannot continue to produce positive results in the coming months, and at the recent re-opening of its revamped Canary Wharf store he seemed confident about Waitrose’s gradual transformation into a multichannel, multi-layered modern supermarket, which could spell bad news for the market shares of its slower-growing rivals.
“We’re really strong, running significantly ahead of the market and it is likely to get better in the second half of the year,” he said.
“Our service standards are better than ever, we’ve increased our product ranges without lowering the quality of products and we’ve lowered prices - we look really good for the autumn.”