Waitrose Corporate Strategy

Despite an increase in sales across the business, pressure has been put on margins as the partnership has looked to push its value proposition in an effort to maintain market share, lowering prices in Waitrose and re-enforcing ‘Never Knowingly Undersold,’ in John Lewis. During these difficult times the chairman has committed to invest in the long term viability of the business, by focusing on growth, driving available sales opportunities and investing in products and services while containing cost.

Waitrose

Being positioned as an upmarket retailer, the company is particularly vulnerable to customers down trading to other mid range grocery retailers. In response to this threat the retailer invested heavily in price and launched campaigns to promote its value credentials.

Despite the turmoil, looking to the long term, Managing Director Mark Price has set ambitious plans to double sales to £8 billion by 2017. Future store growth will largely be organic, but it will carry out a broad ranging review of its sales and formats, which could include new Food & Home stores, additional Market Town outlets and an expansion of its online operation. Following the opening of the chain’s first convenience store outlets in May 2009, Waitrose plans to open up to 300 stores over the next five years, through its partnership with motorway services operator Welcome Break. Other standalone c-store formats are also in the pipeline.

Waitrose will remain firmly focussed on selling high quality food and drink and will not be looking to move further into non-foods, although it does carry a limited range of John Lewis own label products, such as textiles, toiletries, school wear and hosiery.

In addition it is also planning to extend and refurbish outlets across the country. The refurbishments are part of its Store Improvement Programme. Refurbishments are tailored to individual stores and range from major extensions and refurbishments to ‘refresh’ programmes. Further, to build on its reputation as a fresh food retailer, it is bolstering its floor space devoted to fresh foods, with an increase of 15-20% in sales space in each of its stores. It has experienced extremely high growth in sales of locally sourced food, speciality produce, organic food, meat and fish.

In December 2007, Waitrose expanded its export trade with the signing of its first licensing deal in association with Spinney’s in the UAE for the development of some 20 Waitrose-branded outlets by 2010. Waitrose has stated that by expanding its operations overseas it will be in a better position to invest in lower pricing in the UK.

Ocado

Ocado is continuing to expand across the country with the opening of a satellite depot in Manchester. Although sales are continuing to grow, it has yet to make a profit, which is critical if it is to consider a flotation in the near future. To expand its usage it is creating new portals such as a mobile web site.

The retailer is currently conducting a review into the possibility of international expansion, with continental Europe and the US being considered.