Waitrose is to expand its network of convenience partners.
The grocer will extend its partnership with Dobbies Garden Centres to supply a further 50 food halls and is looking to expand its network of Little Waitrose stores, said executive director James Bailey – though he added there were “none in the pipeline at the moment”.
“It’s our belief we are underexposed the convenience channel, and that is something that has held us back in the last year or so,” Bailey said.
Waitrose currently supplies 32 Dobbies food halls, as well as 80 stores within Shell forecourts. It has also expanded its partnership with Deliveroo to 222 shops during the last year. Waitrose has seen 32% growth in its food-to-go categories, driven by more people returning to the office.
Bailey spoke to The Grocer following the publication of the supermarket’s annual results.
Waitrose saw sales fall 3% to £7.3bn in the 12 months to 28 January, driven entirely by declining online sales following what Bailey described as a reversion of shopping habits. Customer numbers were up 7% to 13.7 million, however rising living costs meant they are spending less, with the average basket size declining by 15% in branch.
“We had an exceptional year in 2021, outperforming the market by some considerable measure. So as online has normalised through last year and into this, that downward trend has hit us harder than most,” Bailey said. Online sales now accounted for just over 14% of Waitrose total sales.
Bailey said he remained confident in Waitrose prospects over the next year following progress with its “lean, simple, fast” efficiencies programme. Waitrose has invested £100m in cutting prices, will launch more than 750 new cuisine launches, and will enhance its programme to rationalise ranges in a further 20 categories over the next year, he said.
Echoing the supermarket’s long-running commitment to farmers and animal standards, Bailey doubled down on the supermarket’s commitment to “quality, service and ethics” as a way of helping the retailer stop losing customers to cheaper rivals during the cost of living crisis.
“It’s about making sure we’re clear why customers value shopping with us and making sure we are delivering that,” Bailey said.
The fall in Waitrose sales came as part of disappointing results for owner John Lewis Partnership overall. Inflation increased costs by £180m in the year to 28 January, pushing the group to a £234m loss before tax, down from a loss of £27m last year.
Sales across the group were down 2% to £12.25bn.
JLP chairman Sharon White said it would look to accelerate its efficiencies target to £900m by 2026, up from £300m, as part of a new mantra of “cost out, margins up, customer focus”. In her letter to partners, White said this would come at the cost of some roles.
“As we get more efficient, so as less time has to be spent on processes, things like replenishment of our shelves or night-time picking for online orders, that inevitably means less time and inevitably means fewer partners,” she said.
However, “there are no numbers” decided as yet.
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