Waitrose is getting its mojo back, according to the boss of the upmarket supermarket chain, with shoppers treating themselves more often to pricier items such as green harissa paste and organic beef fillet steak as the cost of living crisis subsides for them.
James Bailey says Waitrose is selling nearly double the amount expected of its range of branded ingredients for recipes by the celebrity chef Yotam Ottolenghi, which launched in April, while sales of its Duchy Organic range are up more than 10%, as are those for its premium No 1 own label range, while sales of its budget Essentials range are falling back.
The affable former Sainsbury’s executive who took charge of Waitrose in April 2020 just after Covid lockdowns began in the UK is trying to fight back against recent gains by the chain’s rival, Marks & Spencer, with a £1bn investment in refurbishing half of Waitrose’s 269 supermarkets and 60 convenience stores to focus on “bringing a food lover’s experience to life”.
The group aims to revamp at least half its existing stores within the next four years and is back on the expansion trail for the first time since Bailey’s arrival, with plans for 100 new convenience stores and four full-size supermarkets over the next five years.
At the opening of one of the first revamped stores – on Finchley Road, north London – Bailey said: “We are getting back on the front foot. It has been well documented that the partnership had to be careful on spending money for a while. Now we are investing in shops to make beautiful and real experiences.
“Over the last year we have seen really strong momentum and at the moment we are on a really positive upward trajectory,” thanks to attracting 1.2 million more customers in the past year, most of whom are shopping in stores.
Availability of products and service had been improved after “a lot of hard work”, he said, attracting more customers who were each spending more.
In the three months to 4 August, Waitrose recorded its strongest growth since November 2023 according to data from analysts at Kantar. Bailey said it marked the 10th quarter of growth in customer numbers, adding: “There’s no one big exciting thing but a collection of doing the right things more often.”
The turnaround in performance is good timing for Bailey – coming just before the arrival of Jason Tarry, a veteran of Tesco, who next month will replace Sharon White as chair of Waitrose’s parent, the John Lewis Partnership.
Tarry is expected to oversee a return to prioritising retail at the group and take a close look at Waitrose’s performance, potentially putting pressure on Bailey who was seen as a surprise hire by White, given his relatively humble role as grocery buying director at Sainsbury’s.
Bailey has faced criticism during his Waitrose tenure after its market share slipped during the cost of living crisis. Industry watchers suggested it had been hit by renewed competition from M&S, had been too slow to cut prices in the face of tightening household budgets and had allowed product availability to slide amid IT problems.
Bailey said: “I have known Jason Tarry for more than a decade and he is a brilliant retailer. That is a great thing for the partnership. I am really excited for him joining. I know he is a big fan of Waitrose and has got big ambitions.”
Criticism of Waitrose’s market share loss was overdone, Bailey said, suggesting that as a premium supermarket it was always unlikely to make gains during a time of straitened household finances when it had halted new store openings to protect profits.
He said it was right to focus on getting its house in order – by investing in technology and its online business as well as improving productivity, reducing staff hours by more accurately matching numbers to busy times – and the market had now swung back in Waitrose’s favour. “Customers are feeling more confident, wages are overtaking inflation and there is a shift back to more normal shopping behaviour with more trading up [to pricier products].”
However, he said there was still plenty more to do to improve the experience for shoppers, with Finchley Road only “halfway” towards the new style of store he wants.
It has expanded fresh meat and fish counters – just as most rival supermarkets have closed theirs – and offers luxurious temptations ranging from six sparkling wine fridges to two cabinets, the chain’s first dedicated parmesan cheese section, Hot Wok Japanese takeaway food and hot rotisserie chicken, regular product tastings and an automated returns drop off point for items bought online from John Lewis.
There is also a dedicated hatch to service out-of-hours demand for the rapidly growing fast-track online orders via the likes of Deliveroo and Uber Eats.
A revamped store in Maidenhead, which opens in a few weeks, will be a further step on before the “all singing, all dancing” version in Newbury, due to open in the spring. “We do theatre in a way other supermarkets can’t,” he said. “It’s service and food experience.”
