Waitrose and Ocado

Waitrose
Waitrose

Waitrose is the supermarket chain of the John Lewis retail group, and consists of 198 branches spread across the country. Waitrose currently has a 4% share of the grocery market and also holds an 18% share of the organic food market.

As with its parent company, the supermarket has built a reputation on targeting a middle-class market, with a high emphasis on quality food and customer service.

Waitrose also differs from the other major supermarkets as it is not owned by shareholders and the City. Instead, it is owned by all employees of the John Lewis Partnership, known as “partners”.

History

Waitrose was founded in 1904 by Wallace Waite, Arthur Rose and David Taylor. The trio opened their first shop in Acton Hill, West London . The name “Waitrose” (a portmanteau of the remaining founders' names – Taylor left in 1906) was adopted in 1908. The major change came in 1937 when the business was taken over by the John Lewis Partnership and the then-160 Waitrose employees were made “partners”, or co-owners of the business.

The first Waitrose supermarket opened in Streatham, London in 1955, but it wasn’t until the 1960s that the company started to grow outside of the capital and the South East regions and into the North and West of England.

In the 1980s, Waitrose became the first major chain to begin selling organic food.

Long-term growth

Aong term goal for Waitrose is to have around 400 stores (double its current business) throughout the UK by 2017, with a larger presence in Wales , the South West, the North of England, and Scotland .

Over the years, the company has expanded its store portfolio by purchasing a number of stores from the likes of Morrisons and Somerfield. In January 2009 Waitrose completed its acquisition of 13 Co-operative (Co-op) sites, and confirmed plans to build nine new stores in 2009.

The 22 new stores will add 4,000 partners to the business and increase its portfolio to 220 supermarkets, marking the largest expansion in the company’s history and boosting its nationwide presence.

Waitrose has also opened a number of smaller market-town stores and convenience stores in order to expand the business and go head to head with the likes of Tesco Express, Sainsbury’s Local and the Simply Food stores from Marks and Spencer.

Waitrose stores

Waitrose operates three store formats: standard Waitrose supermarkets, smaller market town stores and the recently-launched convenience store format.

  • Supermarkets – Waitrose supermarkets focus on high quality produce. They stock a large number of own-brand products and offer one of the largest organic ranges in the UK , with over 1600 organic products. Some stores also offer a selection of John Lewis-branded goods. A number of branches also offer a Quick Check service, which allows customers to scan their goods and pack them as they shop. Payment is then made in one go at the Quick Check till.
  • Market town stores - The smaller market town stores focus on offering customers fresh produce and specialist foods. The first store opened in St Neots, Cambridgeshire, in May 2008 and was followed by outlets in Buckingham, Brackley (Northamptonshire) and two in London .
  • Convenience stores - The retailer’s convenience store format was launched in December 2008 in Nottingham . The 5,800sq ft Trinity Square outlet (its smallest branch) focuses on specialist service counters and fresh produce. It also features a ‘Time of Day’ concept that allows customers to order breakfast, lunch or dinner to go. Three more convenience stores are due to open in spring 2009.

Online services

Shoppers can have their Waitrose groceries delivered direct to their home via Ocado, the online grocery retailer which is part-owned by the John Lewis group, or through the supermarket’s own delivery service called Waitrose Deliver.

Ocado was formed in January 2000 as principal supplier for the John Lewis Partnership, delivering branded and Waitrose own-label groceries. However, regular disagreements between Ocado and John Lewis in 2008 led to the latter transferring its 29% stake in the Ocado business into its pension fund. By doing so, it enabled the two businesses to compete head to head on deliveries, despite Ocado’s five-year contract to deliver Waitrose goods.

As a result, Waitrose has been able to expand its own delivery service, called Waitrose Deliver. The service offers home delivery of Waitrose groceries ordered online but is only available from certain stores, most of which are in London. However, Waitrose and Ocado agreed upon a new five-year deal at the start of February 2009 that will give Ocado exclusivity in London (within the M25) and allow Waitrose to launch its Deliver service in 125 of its supermarkets outside of the capital.

Other services

  • Waitrose Entertaining - Waitrose Entertaining is the retailer’s food catering service for special occasions and events. Menu ideas include oven ready dishes, canapés, celebration cakes, and fruit baskets and can be ordered online via the Waitrose Deliver service.
  • Home Delivery - At selected branches customers can pay a small fee (either £3 or £5 depending on the amount of goods) to have their shopping delivered to their doorstep. A Fast track service is also available to Waitrose or John Lewis account cardholders.
  • Web access - Waitrose supplies dial-up and broadband (up to 8Mb) internet connections and donate all the profits from the service to charity.
  • Waitrose Wine - Waitrose also run an online wine delivery service - Waitrosewine.com. The site features over 1200 wines, champagne, whisky and gifts.
  • Branch extras - the company provides a glass and fish kettle loan service, free of charge.

Overseas operation

In October 2008, Waitrose opened its first overseas store in Dubai (located in the Burj Dubai Mall), offering local residents a range of Waitrose branded goods along with locally-sourced products.

Two more stores in Dubai have opened since – one next to the Dubai Marina and one in a suburb of the city.

Under its licensing agreement with Spinneys, the company which runs 40 supermarkets in the United Arab Emirates and neighbouring Oman , a further 20 Spinneys stores will be converted into the Waitrose format by 2010. Spinneys has been selling Waitrose own-label products in the UAE, particularly Dubai and Abu Dhabi , and Oman since 2004.

Royal Warrant

Waitrose holds a Royal Warrant to supply groceries, wine and spirits to The Queen and previously held a long-standing Warrant with Queen Elizabeth, The Queen Mother. A Royal Warrant is a sign of recognition to individuals or companies who have regularly supplied goods or services for at least five years to certain members of the Royal Family and is regarded as a mark of excellence.