Waitrose. It is worth to care for your customers.

As we claw ourselves out of one of the worst recessions since the Depression of the 1930’s, UK retailers who have prospered through the economic maelstrom are those at either end of the price continuum: hard discounters and premium food stores. Waitrose, a “fine food” supermarket chain increased its grocery market share from 4.0% in 2008 to 5.2% by early-2015. How have they done this during the recession? Keeping their ears finely tuned to the wants of their shoppers, of course, but sometimes acting counter-intuitively – shouting about price, for example which is surprising given that a basket of grocery items from Waitrose is consistently as much as 20% higher than in, say, Asda!

The very successful launch of an entry price own label – “Waitrose Essentials” – served to reassure their loyal customers that Waitrose was trying very hard for them to keep prices down and as close to the “big” supermarket chains ass possible. “Essentials”, presented in simple white packaging and crossing all categories even the luxury ones (olive and jojoba bath foam can hardly be thought of as essential – but, maybe it is for the higher income Waitrose shoppers!), now, account for 20% of sales. On key branded items, like Heinz ketchup, Waitrose matched Tesco and Sainsbury prices and told their customers so!
Waitrose capitalised on the British infatuation with coffee shops by offering a free coffee or tea to any customer with a myWaitrose card, irrespective of whether they bought anything or not in the store. But, if you buy £5 of groceries, you can have a free “Times” or “Daily Mail” newspaper to read whilst having a hot drink. During January, most of their competitors sought to assuage the guilt of Christmas and New Year over-indulgence by offering specials on healthy products. Waitrose stressed reductions to “half price”  on branded items and fresh products which is not a tack one would expect a premium retailer to take. Rich people like to save, too and sales are galloping along at a 2-4% increase which is well above the industry average.
Clearly, Waitrose is showing it can drive footfall and purchases through its stores. It is employee-owned  and this shows in the high level of service and inter-action with staff that is characteristic of the retailer. Shoppers know that they pay more in Waitrose – but their view is that they “pay more for more” and, still, have little treats like free coffee and newspapers. Waitrose may not be top of the grocery league in 2015, but it will continue to show the big boys how to score in an exceedingly competitive market.
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Posted in Loyalty, Premium, Promotions

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About the authors
Prof David Hughes: Around the world, David speaks to senior agribusiness and food industry managers about global food industry developments that are and will affect their businesses and industry. Energetic, engaging, humorous and insightful, David gains the very highest evaluations at seminars, conferences and Board level discussions in every continent he visits. Miguel Flavián: works for several Spanish organisations and companies to help them to learn from the developments of the British grocery market and improve their business back home.
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