WAITROSE

Waitrose Organization

Waitrose Organization

Introduction

This assignment describes focus differentiation strategic models used at Waitrose organisation and its competitive industry. Waitrose environmental is analysed by internal and external factors. Different types of methods have been discussed in this assignment (e.g. PESTEL analysis, SWOT analysis).

Introduction: Waitrose founded in 1904 by Wallace Waite, Arthur Rose and David Taylor. Today its one of the UK's leading food retailers and part of the John Lewis partnership established in 1929. A company held in trust for the benefit of its employees and one of the top ten UK retail businesses, has over 185 Waitrose Supermarkets and John Lewis Department Stores throughout the UK. (www.thestairway.co.uk)

As reported in The Times, Waitrose is seeing a 'flight to value' amongst its customers. The supermarket aims at a market segment of the higher socio-economic groups, and in order to retain them as customers seek to save money on their household bills is following a deliberate strategy of offering more 'value line' goods. Mark Price, Managing Director of the supermarket chain, said that goods sold on promotion had risen “substantially”, from 16 per cent to 23 per cent. He says that shoppers think that Waitrose is 25% more expensive than Sainsbury or Tesco, whereas independent research commissioned by the John Lewis Partnership (owners of Waitrose) shows that the price premium over Sainsbury is only 3.2%. At a time of recession this perception is something they want to correct as they have lost market share (currently 3.5%) over the last six months. The latest 12 week sales growth and market share figures from TNS for the period to10th August 2009 indicate market growth of 5.6%, a slight slowdown from the previous two periods.

Waitrose has emerged as the clear winner for this period, with growth of 10.2%, well ahead of the market and indeed the other multiple retailers. Ed Garner, Director, TNS Worldpanel commented: "Taking the contrasting performances of Waitrose and the Discounters together implies that 'Recession Panic' is abating as far as the Grocery sector is concerned.."12 Week Market Shares

 

12 weeks to 10 August 2008

12 weeks to 09 August 2009

Tesco 

31.2%

31.0%

Asda      

16.7%

17.2%

Sainsbury's

15.6%

15.9%

Morrisons

11.0%

11.4%

Co-op (inc Somerfield)

9.1%

8.2%

Waitrose  

3.7%

3.9%

Iceland

1.7%

1.7%

Netto 

0.8%

0.7%

Lidl   

2.3%

2.3%

Aldi    

2.9%

3.0%

Farmfoods

0.5%

0.5%

Other Multiples 

1.7%

1.8%

Total Independents

2.5%

2.2%

Waitrose has revealed plans to expand its Scottish operations with the opening of its first store in Glasgow in November. Richard Hodgson, Waitrose Commercial Director commented: "We are actively looking at sites in Aberdeen, Inverness, Perth and Dundee, as well as at additional sites in Glasgow and Edinburgh. Glasgow can certainly sustain more than one Waitrose store and we believe Edinburgh can sustain more than two. There is clearly untapped potential in all the conurbations in Scotland. We have a property team looking at sites all the time."

Part of their strategy is to introduce a new 'essential Waitrose' range, investing £47 million in reducing prices, and recognising that as people feel their disposable income is lower they may switch to cheaper products - reflecting negative income elasticity of demand for those inferior goods. Cheaper meats, such as pork, are outperforming costlier options, and ...