Waitrose today revealed it has had the busiest Christmas in its 109-year history as sales broke £300m for the first time in the 14 days to December 31, excluding Christmas Day and Boxing Day.
Managing director Mark Price told Retail Week that the “fantastic” Christmas performance had drawn in 250,000 new shoppers attracted by a strong product offering, price matching and a convenient online service. The number of transactions rose 4%.
Price said Saturday December 22 had been the retailer’s busiest trading day while the retailer took £5m an hour on December 23, which is usually the busiest trading day of the year in grocery but was restricted by Sunday trading laws. “Customers spilled into the Saturday and the Monday,” Price says. Christmas Eve was the second busiest trading day.
Traditionally the festive period has always been a strong period for the upmarket grocer as shoppers trade up to more expensive, better quality products. However, a total sales increase of 8.8% on last year and a like-for-like sales rise of 5.4% point to something further. The performance followed a year in which Waitrose held a record 4.5% market share for much of the year.
“Our Brand Price Match definitely helped, since we launched it we have been considerably cheaper than Sainsbury’s by between 0.5% and 1.5% giving customers the assurance that they can shop with us at good value,” Price says.
The price matching promotion – which matches the 8,000 branded lines sold by both Tesco and Waitrose – has proved popular and Price believes that it, along with a new TV advertising campaign promoting the tactic as well as three for two deals, will ensure momentum continues into January.
Panmure Gordon analyst Philip Dorgan believes an immature store estate, meaning they still have room for expansion, and a strong online business have benefitted Waitrose. He says: “Waitrose is doing a good job, people are not afraid of spending at the top end and it has some good offers at the bottom end.”
Dorgan believes Waitrose will report the strongest grocery results of the Christmas trading period with Asda and Sainsbury’s up against tough comparatives and Morrisons struggling in recent months. Tesco is likely to report stronger numbers than last January when it released a profit warning. Dorgan says Morrisons may need to issue its own warning next week when it updates on Chirstmas trading.
He says: “Morrisons is up against soft comparatives, it’s easy to say it needs to be sharper on price and promotions but harder to execute. Once the ball rolls down hill it’s hard to stop and it may be worth saying ‘profit will be £800m rather than £900m’ and stopping, to invest. Chief executives are allowed to make mistakes but not too many and this could buy him some time.”
The City will be studying Morrisons trading update closely on Monday as an indication of the Big Four grocers’ performance over Christmas.
While its smaller size and scale mean that Waitrose’s success if it does prove to be the strongest Christmas grocery performance should be measured, its momentum going into January should not be underestimated.