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If there is a sign that Waitrose has been finding its form again in catering to Britain’s middle classes, it could be an alliance struck with Yotam Ottolenghi.
The retailer started stocking sauces, pastes and spice blends from the dinner party doyen in late April. Insiders say jars of pomegranate, rose and lemon harissa paste and miso pesto have been selling well, surpassing expectations.
The Ottolenghi mash-up came after Waitrose owner John Lewis Partnership reported it bounced back into profit in the year to January after three years of heavy losses. That was largely down to the performance of Waitrose, which lifted sales by 5 per cent to £7.7bn. The John Lewis department store operations by contrast suffered a 4 per cent sales drop to £4.8bn.
Outgoing John Lewis chair Dame Sharon White said in March the company would now focus further on its retail offering by opening more Waitrose shops and refurbishing existing ones. That broad strategy seems to have been endorsed by the choice of White’s replacement — retail veteran Jason Tarry who starts in September after having spent 33 years at Tesco. But retail watchers will be looking to the details of how Tarry, who is expected to have a hands-on role at John Lewis, carries out that plan and how he will work with James Bailey, the divisional boss of Waitrose, and other executives.
Bailey, a former buying director at Sainsbury’s, joined in April 2020 just as the Covid-19 pandemic struck. Since then it has had a torrid time in the UK’s highly competitive grocery arena from which it is only just now emerging.
Since 2020, its market share has dropped from 5 per cent to 4.6 per cent, and is now only slightly ahead of Marks and Spencer. Surging inflation saw some shoppers trade down, seeking lower prices elsewhere. Waitrose also went through a painful decoupling from Ocado, the online supermarket that sold its products for almost two decades. Just as online shopping received a boost from the pandemic, it was ditched by Ocado for a now resurgent M&S.
And last year Waitrose was plagued by technology issues. It has also lacked the firepower to meaningfully invest in its operations or launch a blitz of price promotions during the cost of living squeeze owing to its unusual employee-owned structure, which limits its financial room for manoeuvre.
Waitrose said this year that it planned to add to its 331 stores in areas where the brand is underserved, its first footprint expansion in about a decade, and refurbish 80 existing ones over the next three years. It is a costly but necessary endeavour, with competition fierce for the scarce space that could be profitable.
Some analysts also suggest that when Tarry arrives, he should work with Bailey to devise a price match scheme to reinforce Waitrose’s value credentials. Both Tesco and Sainsbury’s have credited their initiatives to match discounter Aldi on price on hundreds of items for bolstering sales over the past couple of years.
“You wouldn’t be surprised if Tarry comes in and goes, ‘we had real success matching Aldi at Tesco’. Maybe Waitrose doesn’t need to match Aldi, but if they brought in Sainsbury’s price match or M&S price match, that would help,” one industry watcher said.
But Richard Hyman, a retail analyst at Thought Provoking Consulting, believes Waitrose should not try to be “all things to all people” and rather be confident in its upmarket offering and pricing.
Waitrose is also seeking to deepen its relationship with its customers as the likes of Tesco and Sainsbury’s have done with their loyalty schemes. The group said last year it would launch a programme this year that would span John Lewis and Waitrose. The retail industry will also be on the lookout to see if Waitrose reintroduces a perk similar to its free newspaper offer for loyalty cardholders, which was scrapped amid cost-cutting efforts in 2022
Tarry was instrumental in turning round Tesco after it was hit by an accounting scandal in 2014. Hyman says the hope is that Tarry can do something similar at John Lewis and Waitrose. But he says that the culture of Tesco is very different to that of the risk-averse Waitrose. Tarry will have to “get involved in the weeds” of the retailer’s operations. “This is a huge career move,” says Hyman.
laura.onita@ft.com
