Tesco and Waitrose, which both announced record half-year results this week, are winning the hearts of shoppers for their respective clear and consistent approaches, say analysts.
They say Waitrose’s interims showed retailers didn’t need a purely price-driven strategy to make headway against Tesco.
Waitrose claimed it was stealing shoppers from other retailers by focusing on quality and regionality in opposition to price-led campaigns.
The retailer posted 4.4% growth in like-for-like sales to £1.6bn in the six months to July 30, with divisional trading profit up 17% to £107m.
“We believe these results are largely due to providing a clearly differentiated offer that is less price-driven than other supermarkets such as Tesco and Sainsbury,” Waitrose MD Steven Esom told The Grocer.
“It’s a question of right place, right time for Waitrose,” said Paul Smiddy, analyst at RW Baird.
“The chain is absolutely on the button regarding its ethical stance and its approach to organic foods.”
Richard Ratner, analyst at Seymour Pierce, said: “Waitrose is the only food retailer with its own congregation. Everyone else seems to have shoppers who come and go.”
However, Tesco’s price-driven offer didn’t seem to do it any harm as it was this week’s biggest winner with sales up 14.1% to £18.8bn in the 24 weeks to August 13.
Smiddy said it was no coincidence that Tesco and Waitrose had pushed consistent marketing messages, whereas the line from Safeway and Sainsbury had tended to vary.
And he added Waitrose had won over customers from Safeway stores while they had been in disarray following their acquisition by Morrisons.
Esom said: “To grow in this market, you have to win over shoppers from other players.”
He said Waitrose’s emphasis on local and regional sourcing had appealed to consumers in contrast to the globalisation of other supermarkets.
He said Waitrose would continue targeting stores in the north of England as part of its expansion plans after acquiring several Safeway stores in the last year, including one in Durham.
The retailer aims to have 173 stores open by 2006.
By contrast, the Co-operative Group’s food sales fell by £34.1m. It attributed this to the downturn in the retail market and ongoing availability issues.
But food pre-tax profit had been boosted by 12.1% to £41m due to moves to reduce overheads. A refit programme in the second half, plus a focus on fresh produce, is aimed at boosting its food performance.
Rod Addy
They say Waitrose’s interims showed retailers didn’t need a purely price-driven strategy to make headway against Tesco.
Waitrose claimed it was stealing shoppers from other retailers by focusing on quality and regionality in opposition to price-led campaigns.
The retailer posted 4.4% growth in like-for-like sales to £1.6bn in the six months to July 30, with divisional trading profit up 17% to £107m.
“We believe these results are largely due to providing a clearly differentiated offer that is less price-driven than other supermarkets such as Tesco and Sainsbury,” Waitrose MD Steven Esom told The Grocer.
“It’s a question of right place, right time for Waitrose,” said Paul Smiddy, analyst at RW Baird.
“The chain is absolutely on the button regarding its ethical stance and its approach to organic foods.”
Richard Ratner, analyst at Seymour Pierce, said: “Waitrose is the only food retailer with its own congregation. Everyone else seems to have shoppers who come and go.”
However, Tesco’s price-driven offer didn’t seem to do it any harm as it was this week’s biggest winner with sales up 14.1% to £18.8bn in the 24 weeks to August 13.
Smiddy said it was no coincidence that Tesco and Waitrose had pushed consistent marketing messages, whereas the line from Safeway and Sainsbury had tended to vary.
And he added Waitrose had won over customers from Safeway stores while they had been in disarray following their acquisition by Morrisons.
Esom said: “To grow in this market, you have to win over shoppers from other players.”
He said Waitrose’s emphasis on local and regional sourcing had appealed to consumers in contrast to the globalisation of other supermarkets.
He said Waitrose would continue targeting stores in the north of England as part of its expansion plans after acquiring several Safeway stores in the last year, including one in Durham.
The retailer aims to have 173 stores open by 2006.
By contrast, the Co-operative Group’s food sales fell by £34.1m. It attributed this to the downturn in the retail market and ongoing availability issues.
But food pre-tax profit had been boosted by 12.1% to £41m due to moves to reduce overheads. A refit programme in the second half, plus a focus on fresh produce, is aimed at boosting its food performance.
Rod Addy
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