Waitrose: plans major move into convenience

London / UK. (wr) Waitrose, Britain´s fastest-growing supermarket, signals its intent to create a significant impact on the convenience market through the development of new formats and channels that will dramatically increase its presence in the United Kingdom.

In announcements covering both expansion through strategic relationships and organic growth, Waitrose is setting out its plan to be accessible to vastly increased numbers of customers. Currently 6,5 million potential customers are unable easily to access Waitrose.

Some days ago Waitrose reported strong growth for the half year ending 01 August 2009, with gross sales up 7,4 percent, operating profit (excluding property profits) up 18,7 percent and customer numbers up by nearly six percent overall.

Managing Director Mark Price said in a statement: «We have broadened the appeal of our brand with innovations like Essential Waitrose, the ‘Seriously’ range of indulgent cakes and desserts, Duchy Originals from Waitrose, new non-food ranges, and by being the first UK supermarket to get rid of delivery charges for online grocery shopping – and we are seeing real sales momentum as a result. Now, by opening up these new channels and formats, we will be making Waitrose accessible to more customers in more places and we will be able to create thousands of new jobs. We have just reported a robust first half of the year and with continued strong performance from our existing stores and this move into the convenience market, we are planning for double digit growth for the foreseeable future».

Strategic relationships

Waitrose announces two strategic relationships that will accelerate its presence in convenience. Based on the success of a trial, Waitrose is announcing the scaling up of its relationship with «Welcome Break». In addition, a new relationship with «Boots UK» is unveiled. Price: «Working with partners of this quality, with their strong reputations and extensive representation, will mean we make a dynamic entry into convenience and fully exploit the business opportunity».

New formats

Waitrose has made successful moves into new formats with convenience branches. The first of the convenience branches in Nottingham was opened in December 2008 followed by Bristol in March 2009. Both are performing well and two more will come on stream soon – North London in October and Surrey in December. These four shops have created more than 250 jobs. In the new year, Waitrose plans to trial smaller convenience shops. This move gives Waitrose an overall potential for 300 convenience branches, the company says.

Commentary: Waitrose will find it tougher than it thinks to meet its target of opening 300 convenience stores within the next ten years, experts have warned. «This is really putting enormous pressure on the organisation», said Bob Farrand, director of the Guild of Fine Food Retailers.

About: Waitrose in mid-September reported strong growth for the half year ending 01 August 2009, with gross sales up by 7,4 percent to 2,18 billion GBP. Like-for-like sales for the half-year grew 1,8 percent, excluding petrol, and operating profit, before exceptional items, property profits, launch and other one-off costs, grew by 20,1 percent to 127,8 million GBP. The strong performance was driven by the introduction of the new essential Waitrose range, the successful conversion of the Somerfield-acquired stores and free delivery driving rapid online growth. In 2009 Waitrose has increased retail space by over four percent with the opening of 16 new and acquired shops and the opening of the first two Waitrose shops in Welcome Break service stations, creating 1’500 new jobs. A further eight store openings this year will create an additional 1’000 jobs. The retailer has also opened its second shop in Dubai and plans to open a further store in the Middle East in Bahrain next year.