Waitrose boss: ‘Our strategy is to do the opposite of what everyone else is doing’

Waitrose’s response to the rise of the discounters will be to do the ‘opposite of what everyone else is doing’ by focusing on promotions and providing value to members of its loyalty scheme, rather than lowering its prices.

Waitrose

Speaking at an event in Swindon on Friday (2 May) to outline its response to the changes impacting food retail, chairman Mark Price said Waitrose had so far been relatively resilient to the rise of discount stores such as Aldi and Lidl. He claimed Waitrose has lost none of its most valuable customers, which he dubbed “gold” shoppers”, and only some if its “silver and bronze”.

He added that Waitrose does have to be competitive on price and will continue to price match with Tesco and compare the cost of its own own brand range with Sainsbury’s. However, it won’t be changing strategy and will continue to invest the £500m it spends annually on the more than 1,800 promotions it runs every week, rather than cutting prices permanently.

It will also offer better value to its myWaitrose members, which now number 4.5 million and account for 70 per cent of sales, up from less than 1 million a year ago.

“We are very happy if everyone else moves from promotions to every day low prices because we will be differentiated as a business where you can come and get great promotions. There is an attractiveness in saying ‘if you are a myWaitrose customer we’ll give you better and better value and we’ll give you better and more of it’. That feels like a real point of difference,” he said.

Price said Waitrose’s aim is to be “everything that the discounters aren’t” through a focus on service, range and making coming to its stores an experience. The supermarket is making a major push into fresh food and food-on-the-go in particular following the success of its move to offer free tea and coffee to members of myWaitrose, which Price claimed was a first step in “training” its customers to use Waitrose in a different way.

It has introduced new features including a standalone fruit juice bar and “grazing areas” in sections including bakery and wine where customers can buy food and drink to consume in-store. So far these have proved very popular and helped the Swindon branch to beat expectations in the first four weeks since opening, with sales 50 per cent ahead of budget.

On service, Waitrose has expanded its “welcome desk” concept which is already in 127 locations and aims to emulate the type of service people would find in a hotel. It offers free tea, coffee and iced water, as well as access to services such as dry cleaning and click and collect.

In online, Waitrose will “imminently” launch a new website for its wine business that will offer a closer link between content and commerce. New product pages will include information and, for the first time, customer reviews, as well as video recommendations from staff.

Price said as the supermarket industry continues its shift to more people shopping across different formats, the blur between grocery and hospitality will “blur”. Waitrose now tells its branch managers that they are running three businesses: a traditional supermarket, a takeaway and eat-in hospitality business and a .com business.

“We have to get customers to think about our shops in a different way. Educating our customers that they can use the branch for hospitality and online and then develop that through,” he said.

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