Mark Price has made his mark on various fronts since taking the helm at Waitrose. In addition to introducing the successful Essential range the store network has continued to grow, while the new convenience and market town stores challenge Marks & Spencer’s Simply Food.
These developments are tracked and their impact assessed in Retail Week Knowledge Bank’s recently updated profile of the John Lewis Partnership.
Next up is the assault Waitrose is about to launch with its home delivery service within the M25, effectively in direct competition with Ocado, which currently sells its products. The sale by the Partnership’s pension fund of its residual 10.4% stake in Ocado in February coincides with the ending of the agreement preventing Waitrose operating its own delivery service within the M25.
Waitrose has been quietly gearing up, relaunching its website while investing £10m in a 100,000 sq ft warehouse at Acton and relaunching its website as Waitrose.com. Waitrose started limited deliveries around London early this year, but the service will be fully rolled out from July.
The stakes are far from insignificant. Retail Week Knowledge Bank estimates Waitrose’s online sales in 2010/11 were about £180m, with management reportedly anticipating a 30% uplift for 2011/12, implying about £225m to £250m. A major proportion of this increase will be generated within the M25, with much more to come in the first full year in 2012/13, when Waitrose’s overall online total could exceed £300m.
Ocado will fight to retain its loyal customers, while recruiting more from its separate demographic. There is then the prospect of the semi-internecine, upmarket skirmish spilling out beyond the confines of the M25, where hitherto the action has been more shadow boxing than head-on.