Following today’s release of Waitrose & Partners’ figures for the 52 weeks to 28 January 2023; Joe Dawson, Retail Analyst at GlobalData, a leading data and analytics company, offers his view: “In a year that has been defined by constrained consumer spending and a rise in the prominence of discount retailers in the food & grocery market, it is no surprise that Waitrose & Partners has been the biggest casualty. Like-for-like sales fell 3% and total revenue declined 3.4% compared to FY2021/22, while trading operating profit was down 12.4% to £894m. Following a poor H1 where the grocer reported a decrease in sales of 5.5%, Waitrose & Partners will have seen a more significant drop in volumes in the latter half of these results, driven by high inflation in the sector. The premium grocer needed a strong sales performance over Christmas, which it was unable to achieve, while discounters Aldi and Lidl reaped the rewards of lower prices with sales growth of 26% (for December 2022) and 24.5% (for the four weeks to 25 December 2022) respectively. Tesco and Sainsbury’s also reported stronger results for their respective third quarters, highlighting Waitrose & Partners’ underperformance and subsequent loss of market share in the sector.
“With food inflation reaching heights of 16.9% in December 2022, and consumers facing higher energy bills and limited disposable incomes, many are seeking greater savings when grocery shopping, switching to more affordable retailers like Aldi and Lidl, or trading down to own brand products within a retailer. Waitrose & Partners reported a 15% decrease in basket size in its stores, a symptom of consumers spreading their shop over several retailers to save money. While major supermarkets Tesco and Sainsbury’s focused efforts in 2022 on price-matching Aldi and Lidl and revamping loyalty schemes, Waitrose & Partners’ efforts have been too little too late. The premium grocer has announced that it was investing £100m into new price reductions in February 2023, but many consumers have already begun to switch to discounters and other supermarkets.
“With inflation forecasted to fall back in Q4, Waitrose & Partners will continue to play catch up in 2023. The retailer has already set in motion several plans in an attempt to recapture market share, but it will be an uphill battle for it to regain consumer confidence and entice shoppers back. Alongside investment in price, Waitrose & Partners is right to be investing in revamping its stores to appeal to more shoppers. The grocer announced that it would be making efforts to expand its convenience offering, both instore and online, increasing the number of stores in Shell forecourts and Dobbies garden centres as well as enhancing the range of products available in its partnership with Deliveroo.”
