January 17, 2012
Talk with Sam Dickson of Waitrose
Sam Dickson: "Quality, value, service and fairness can still be applied via an iPad"
Waitrose operates 243 supermarkets, superstores and convenience stores in the UK and posted 2010 revenues of around €5.5bn. This makes it number six in the trade with a market share of around 4 per cent.
Waitrose is probably the fastest-growing retailer in England and intends to nearly double in size by 2020.
Like its parent company John Lewis Partnership, Waitrose is staff-owned and sets international standards for corporate democracy and the way it cares for staff.
Its roots go back to 1904, and the first store under the "Waitrose" banner was opened in 1953. This seniority could make the grocer appear somewhat middle-aged to today's smartphone-toting generation of consumers.
Indeed, Waitrose has been accused of being a Middle England shopkeeper for a "salt & pepper" clientele. So what is Sam Dickson doing to refresh the brand?
Ms Dickson, to what extent do you feel threatened by the success of market leader Tesco’s premium range “Tesco Finest”?
I'm afraid I must decline to discuss the commercial strategies of our competitors.
True, but you have come to talk about the Waitrose brand, and whereas all retailers know where own label begins, some don’t seem to know where it should end. For instance, it could be claimed that Tesco has diluted its brand by overextending “Tesco Finest”?
We don’t have a blanket approach. Each of our own brand ranges has a very clearly-defined structure and framework within our business and they are developed to meet specific customer needs. Thus we are very clear about where our brands can and can’t go.
Is this why you haven’t developed a top-tier brand which goes across all product areas?
We’ve adopted a different approach. Life for our customers is all about healthy balances, so we have developed a strict list of requirements for each category to meet.
We are therefore British and organic with our "Duchy Orginals" range; "Menu from Waitrose" offers restaurant-quality meals conveniently at home; "Seriously from Waitrose" will give you the most fantastic sweet experience that you can have; and "Heston" is innovation, surprise and great quality.
Is it true that you even sell your “Duchy Originals” and “Seriously from Waitrose” brands to foreign retailers?
Yes, El Corte Inglés already lists our “Duchy Originals” and “Seriously from Waitrose” products; and we have an international team who sell our brands across the world.
Why do it?
We’ve developed own label which we believe is as good as any fmcg brands, so why not allow more people to share our food?
Waitrose was once a very middle-class affair. Given the recession and austerity measures in the UK, will your “essential Waitrose” value range suffice to stop customer erosion in favour of Lidl and Aldi?
Don’t forget that establishing a new range can take a good ten months to develop before it is launched. The timing was therefore coincidental. You must also remember that, although Aldi and Lidl are growing here in the UK, hard discounters don’t have anywhere near the impact they do in Germany.
In fact, the “essential Waitrose” range was neither created in response to a recessionary scenario nor as in reaction to Lidl and Aldi, but to the needs of our more price-conscious customers.
Waitrose is harnessing the “locatarian” trend by also listing more than 400 small local suppliers in the UK. Does this, however, make commercial sense, given the extra organisational hassle?
Your question begs an essential point. Our whole raison d’être as a retailer is to provide our customers with what they want, and they clearly want local products. Ultimately, everything we do is in response to our customers, and we serve our customers through the products that we sell.
Therefore, listing local suppliers clearly makes commercial sense. It also marries with the strong ethical stance throughout our business.
Meaning respect for the environment?
Not just that. Our retail brand is also about what we put back into the community. We consider it our duty to support the local communities who shop with us, and we therefore regard it as an obligation to support local businesses.
You have long owned a farm in the UK (Leckford Estate, Hampshire). Why go to the trouble of becoming a land owner?
It is a small, but an historical part of our business culture. Farms don’t only provide product to our stores and contribute to making our business profitable. We also learn a great deal in terms of farming methods and innovation, which we can then share with others, including suppliers.
Your CEO, Mark Price, says that you want to be “really big” in e-commerce via your own online shop (Waitrose.com) and an exclusive ten-year deal, signed in May 2010, to supply Ocado with food sourced from Waitrose. Won’t this compete with your 280-odd bricks & mortar stores?
We are lucky in that we are not in an “either/or” situation. As a relatively small retailer who also doesn’t operate very many large stores, there are lots of places we can still go in the UK and we have a lot of gaps to fill on the map. Wherever we go, we take market share from our competitors, so why not try to be ubiquitous and bring Waitrose to more people?
Which is why you have been trialling various forms of partnership with Boots, Shell and the “Welcome Break” roadside service stations since 2009 as well as diversifying your store base?
Correct, but we only link up where the brands in question are similarly positioned on the market place, have similar values, and are experts in their chosen field. Our aim is to get more products to more people in whatever retail situation they require.
Therefore, beyond our standard medium-sized outlets, we are also developing “Little Waitrose” convenience shops, large “Food & Home” and "Food, Fashion & Home" stores as well as online.
Could you tell us more about the strategic thinking behind the launch of your new convenience chain?
It was principally because we haven’t a presence throughout the whole of the UK, and large sites are not always available. We can thus bring Waitrose to more customers, but still offer them a fairly full range in store sizes with 2,000 ft² (200m²) to 6,000 ft² (600m²).
“Little Waitrose” also meets different customer shopping habits because there is a weekly shop, a mid-week shop, every-couple-of weeks shop etc. etc.
Waitrose is proud of its traditional values, but how can a company created in 1955 continue to interest today’s smartphone-toting consumer?
The core values of the brand don’t change; you just have to continue to meet your customers’ needs. So quality, value, service and fairness can still be applied via an iPad or in any other way the customer wishes to interact with us.
Read in German: Interview by Mike Dawson in Lebensmittel Zeitung, Nr. 51, 23.12.2011