Waitrose warns on profit after ‘unprecedented investment’ in marketing

Waitrose has warned its first half profits will be impacted after a period of “unprecedented investment” in areas including price, promotions, online and its myWaitrose loyalty programme.

Waitrose
Waitrose issues profit warning after detailing ‘unprecedented investment’.

In a statement released today (1 August) Mark Price, Waitrose managing director, says the first six months of the year have marked “a more turbulent time for food retailing than any of us can remember”.

In the “remarkable” six months to 26 July, Waitrose predicts it will report sales growth in the region of 4.5 per cent when it releases its interim results on 11 September.

But the supermarket’s profits will be hit by a series of investments made with the intention of building a “strong business for the future” against a tough competitive market, it warns.

Those investments have included price-matching, promotions and a deal to its myWaitrose members, offering a discount on butter and milk without cutting the price it pays to its dairy farmers.

The supermarket has also built out its online business, opened new stores and improved existing ones, offered up new services and hospitality and invested in using its myWaitrose programme to understand customer behaviour better.

On the above the line marketing front, Waitrose has invested significantly in its content strategy over the past six months, including funding a Saturday morning cookery show on Channel 4 presented by Lisa Snowdon and Steve Jones. The company also became the sponsor of the England cricket team this year.

Price says: “Everything we’re doing is enabling us to compete well now – continuing our five-year out-performance of the industry – and build the modern Waitrose equipped to succeed in the very different grocery landscape of the future.”

Earlier this week figures from Kantar Worldpanel found Waitrose is close to be overtaken as the sixth biggest supermarket in terms of market share by discounter Aldi.

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