Following today’s release of Waitrose & Partner’s figures for the 26 weeks ending 29th July 2023; Eleanor Simpson-Gould, Senior Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “The 26 weeks to 29 July 2023 mark what have been a fraught period of mounting focus on how the John Lewis Partnership can revive its grocery division, following a -3% decline in Waitrose & Partners’s sales for FY2022/23. While it has become commonplace for John Lewis & Partners to post less favourable results in H1, Waitrose’s & Partners -5% decline in sales for H1 FY2022/23 laid ground for a strong revival for the first half of FY2023/24. However, while trading periods are not directly comparable, with growth of just +4% Waitrose’s & Partners latest H1 results fall far short of close rival Marks & Spencer (+11.0% for the 19 weeks to 12 August) and trail the strong uplifts achieved in Q1 by Sainsbury’s (+11.0% in grocery) and Tesco (+9.3%). With the golden quarter of sales due to begin this week, and food inflation expected to fall to single digits in Q4, a strong performance in H2 is critical to slow Waitrose & Partners’s 0.3% food & grocery market share loss forecast by GlobalData for 2023.
“While Waitrose’s affluent customer base is less exposed to the cost-of-living crisis than rivals, the retailer has been remarkably slow to counter price matching and value range propositions undertaken by rivals. It is now however strengthening its focus on value, with a New Lower Prices campaign supported by a third round of price cuts announced this week. Crucially this includes new meal deals and dining at home options in efforts to boost persistent volume declines. Where Marks & Spencer has successfully invested in new product development Waitrose & Partners must be cautious not to drive up costs in an effort to remain innovative. The added complication to Waitrose & Partners’ efforts to improve operating costs is its partnership model, which drives high levels of staff loyalty, but the consensus driven model makes it harder to drive change through the business. Waitrose & Partners has recently announced plans to improve efficiency and value by re-aligning partners working hours in store to better suit the needs of the business. Renowned for customer service deriving from its unique partner model, Waitrose & Partners risks further damage to the morale of partners, which may erode the unique customer service which adds value for money to the price point of Waitrose & Partners products.
“The latest H1 results have failed to shed light on the success of Waitrose & Partners’s partnership with Dobbies, Shell and ultra-fast service Deliveroo; it has merely stated progress is continuing in these collaborations. Convenience is now a major strategy investment for major UK supermarkets, seeking to improve ultra-fast delivery propositions, store portfolio expansion and third-party collaboration to reach a wider customer base. The limited progress update on Waitrose & Partners’s latest efforts to expand market share in new ventures suggests investment in this strategy has yet to bear fruit.”
