Why Waitrose is turning its focus to convenience again

Last week, Waitrose unveiled plans to open 100 new Little Waitrose stores over the next five years, along with four new supermarkets.

That may sound ambitious, but Waitrose has been here before. In 2008, after opening the first Little Waitrose store, then John Lewis Partnership chairman Mark Price declared Waitrose would build “hundreds and hundreds” more over the coming years.

In 2009, Waitrose set a target of 300 over the next 10 years, but those numbers never materialised. And recent years have seen Waitrose retreat from the sector. Its footprint has fallen from 61 in 2019 to 44 standalone stores currently, alongside 27 Welcome Break shops, and supply agreements with a further 90 Shell forecourt sites.

So, given its previous struggles, why is Waitrose making such a big play in convenience again? And how can it ensure success this time around?

Learning lessons – from its past and from its current store footprint – will be crucial if Waitrose wants its latest convenience store push to be a success, analysts warn.

Its last push into convenience “foundered on poor site locations” claims independent retail analyst Nick Bubb. So finding the right locations will be an essential starting point.

So far, Waitrose has given little detail on where it will target its latest rollout, other than that it includes potential stores in England, Scotland and Wales.

The first new Little Waitrose will open on a shopping parade in Hampton Hill, London, some time before the end of 2024. A second will open in “Greater London” in early 2025.

Waitrose retail director Tina Mitchell has said the retailer “sees opportunity” in sites with a footprint of between 3,000 sq ft and 6,000 sq ft, as it focuses on “neighbourhood missions”.

Once the locations are decided, it’s about creating the right experience and range, says Andrew Busby of Redline Retail Consulting.

Previous iterations of Little Waitrose haven’t been different enough from its standard supermarkets, he argues.

“A convenience store is far harder to merchandise because you’ve got far less space, but you’ve still got to carry quite a large line of products. From Waitrose’s point of view, what’s going to make you different? What’s going to make you stand out as a convenience store?”

 

Convenience growth

On that point, there is plenty in Waitrose’s favour. Lumina Intelligence identifies three areas driving convenience growth that are a good fit: local shopping, food to go and “accessible low ticket treating”.

The rewards could be substantial, given that Lumina expects the convenience sector in the UK to grow by 4.2% by the end of the year, reaching a value of £49.4bn.

Getting that offer right has no doubt been a focus of the past couple of years, during which Waitrose has been “gently” carrying out some work on its existing Little Waitrose stores, according to Mitchell. It’s been looking at ranges, adjusting the mix of fresh to ambient and “remodelling the flow” around some, she reveals.

More specifically, catering to the return-to-office crowd is one opportunity previously highlighted by Waitrose executive director James Bailey. When he first told The Grocer of plans to grow its “underexposed” convenience offer in March 2023, food to go sales had increased 32% on the previous year.

Since then, Waitrose has further upped the ante in this area. In August last year, it launched its first ever £5 lunchtime meal deal. Then in February, it expanded and rebranded its entire range of own label sandwiches and wraps.

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Other innovation efforts have focused on new ‘dine in’ solutions, which similarly play well in convenience. Booze and bakery – two other categories where Waitrose typically trades well – are also a good fit, points out Lumina insight director Blonnie Whist.

“We’re seeing consumers much more focused on store experience. They really want quality. All of that is playing to Waitrose’s strengths,” she says.

The question is whether Waitrose can use those strengths to outmanoeuvre the rest of the mults, who equally have their eye on the convenience opportunity.