What's in it for Waitrose? I still can't get my head around the news that it's contemplating taking on the operational costs of Duchy Originals in exchange for an exclusive supply deal.
I suppose there is the exclusivity aspect: Duchy constitutes one hell of a tertiary brand and there's a measure of gratification to be derived from the knowledge you're the only major supermarket selling it (Sainsbury's being the obvious loser in this regard). It will also be able to bask in the warm glow of satisfaction that it has rescued a brand that would otherwise be heading the way of so many other worthy businesses in the recession. But the timing of the bail-out, though clearly dictated by Duchy's parlous financial state, is hardly ideal as far as Waitrose is concerned. This is the retailer that, after all, has spent the last year or so banging on about its value credentials - and with good reason. At the beginning of the recession, it was losing out hand over fist to rivals with stronger value offers and only really got sales moving again when it launched its Essential Waitrose range in March.
The Essential range topped £100m sales within three months and now makes up 13% of the retailer's total sales, so the strategy has clearly worked. Not that suppliers like it much. Indeed, the once resolutely premium retailer has gone so far down the value road that it has started to draw unfavourable comparisons with M&S's 'Project Genocide'. Some suppliers even cheekily dubbed it 'Wasda' after its appointment of Richard Hodgson from the Leeds-based retailer.
Given the overwhelmingly positive consumer response to Waitrose's new mass market proposition, however, the decision to rescue premium, niche brand Duchy is surprising. This is surely not the brand to reinforce Waitrose's new value credentials. Its organic customers will be delighted, though.
I suppose there is the exclusivity aspect: Duchy constitutes one hell of a tertiary brand and there's a measure of gratification to be derived from the knowledge you're the only major supermarket selling it (Sainsbury's being the obvious loser in this regard). It will also be able to bask in the warm glow of satisfaction that it has rescued a brand that would otherwise be heading the way of so many other worthy businesses in the recession. But the timing of the bail-out, though clearly dictated by Duchy's parlous financial state, is hardly ideal as far as Waitrose is concerned. This is the retailer that, after all, has spent the last year or so banging on about its value credentials - and with good reason. At the beginning of the recession, it was losing out hand over fist to rivals with stronger value offers and only really got sales moving again when it launched its Essential Waitrose range in March.
The Essential range topped £100m sales within three months and now makes up 13% of the retailer's total sales, so the strategy has clearly worked. Not that suppliers like it much. Indeed, the once resolutely premium retailer has gone so far down the value road that it has started to draw unfavourable comparisons with M&S's 'Project Genocide'. Some suppliers even cheekily dubbed it 'Wasda' after its appointment of Richard Hodgson from the Leeds-based retailer.
Given the overwhelmingly positive consumer response to Waitrose's new mass market proposition, however, the decision to rescue premium, niche brand Duchy is surprising. This is surely not the brand to reinforce Waitrose's new value credentials. Its organic customers will be delighted, though.
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