How Waitrose Differentiates From Other UK Supermarkets

How Waitrose Differentiates From Other UK Supermarkets

Waitrose, a small grocery store established in West London in 1904 has now become one of the largest retailer brands and a household name. Let’s take a look at its journey of monumental growth.

Established in the early 20th century, Waitrose has now become one of the leading retailers of groceries and a household name in the UK. Under the wing of its parent company John Lewis Partnership - an employee-owned business - Waitrose stands apart from the competition with its unique business model. The supermarket brand has earned a global upmarket reputation due to the superior quality of its products that are offered at economical prices.

Here are some Waitrose facts and figures that highlight Waitrose’s status as a leading brand of supermarkets:

Waitrose is a trusted name that has not only maintained the quality of its products and services but also continued to grow continuously. Let's now take a detailed look at Waitrose’s journey of becoming one of the UK's most favorite brands.

The Business Grows Roots

Waitrose began its journey as a small grocery store in West London in 1904. Back then, it was a joint venture between three men. However, while Waitrose was initially a modest shop, it soon acquired more stores and eventually, even caught the royal family’s attention.

The People Behind The Business

Wallace Wyndham Waite, Arthur Rose, and David Taylor joined hands (and names!) to open Waite, Rose & Taylor - the grocery shop that started it all.

Waite-Rose-and-Taylor-1906-storefrontSource

From the beginning, the shop sold a large variety of premium quality foodstuff.

Each partner contributed towards the business in their capacity:

  • Waite was responsible for making purchases,
  • Rose managed the accounts, and
  • Taylor provided his services by working on the shop floor.

Answering the question of why is Waitrose called Waitrose. For a few years, the three partners operated in this manner, and the business ran smoothly. In 1908, however, Taylor left the business, leaving the other two having to steer the reins.

The two decided to change the enterprise’s name to Waitrose Ltd - the name that is now familiar to us all. It was also a pivotal point for the small store as the two partners expanded the business into the surrounding area by acquiring more stores, and going from one outlet to a small chain.

World War Strikes

In 1914, when the first world war broke out, the world changed. For a small business like Waitrose, it meant that it had to change in order to survive.

Thus, the business diversified into wholesale trade and began supplying goods to the army at Catterick. This was mainly handled by Waite, ensuring the company did not have to close its door.

However, not everything survived the war. Rose was injured in service, and in 1924, his persisting health issues prompted him to step down from the business.

After Rose left, Waite was the only one in charge of the business. From a partnership of three, it was now a one-man show. But that in no way meant a low time for the company.

In fact, the business was thriving and it had garnered a reputation for upholding high standards. Just as Waite had led the company strongly during the war, he led by example afterwards, often visiting the different branches and personally checking the products, services, and level of cleanliness of the store.

Gaining Prestige With The Course Of Time

Within a few years of business, the reputation of Waitrose in the industry had grown manifold. It came as no surprise then when in 1928, the Windsor branch was issued a Royal Warrant by King George V to supply groceries and cleaning materials.

The Royal Family bestowed the mark of recognition on companies that had served the royal household for at least five years. Waitrose, particularly, had been supplying Queen Mary with her favorite honey soap.

This was a huge stepping stone for the brand allowing it to stand out unconventionally, and build an image of prestige for itself. From there on, Waitrose expanded by opening up stores in affluent areas of the country. It began quickly setting up an upmarket reputation for itself by advertising its high standards of quality.

Waite also took the initiative to promote products from all over the Empire, claiming that Waitrose offered “the world’s choicest foods.” A label that set it apart from other store chains and also helped it earn further recognition by the British government.

Eventually, the championing of these products earned Waitrose an MBE - Member of the Most Excellent Order of the British Empire - the third highest-ranking Order of the British Empire award.

Waitrose’s Unconventional Ways Working Wonders

For several years, Waite was the face of the company, leading it to new markets and new heights. But of course, he could not offer the same energy and proactiveness he had done earlier.

In 1937, realizing the company needed renewed energy and a fresh approach, Waite needed someone to take over the responsibility for the store from him. Simultaneously, it was crucial for him that the Waitrose chain would maintain its high standards of quality that had become its major strength over the years.

The solution, however, was not in the form of a natural successor to Waite’s position.

Instead, in October of 1937, Waitrose merged with the John Lewis Partnership to become Waitrose & Partners. This brought new ideas and an unconventional approach to the company.

John Spedan Lewis, the founder of John Lewis Partnership, made several changes to how things around the store worked. Most notably, in 1950, Lewis signed a deed of settlement that effectively transferred the ownership of the Partnership to its employees.

Although he was in practical control of the company, the model of staff sharing in the business' profits is successful to this day.

Another testament of Waitrose’s unconventionality was its move to self-service stores in the 1950s. Counter service was the norm at that time, which was time-consuming for both staff and customers. Years ahead of its time, the company experimented with self-service shopping at a chain of stores in Essex.
waitrose-selfserve-1950sSource

As the model showed great potential, after a few years Waitrose opened its first supermarket in Streatham.

Expanding Business One Supermarket At A Time

By the early 1970s, Waitrose had around 50 different branches, including small stores and supermarkets. But the emphasis now was on establishing supermarkets – scaling up.

This meant the business was experiencing rapid expansion and it required more staff members to manage it. It also needed to ensure its employees knew the system of the store allowed operations to run unhindered with large-scale onboarding. Therefore, Waitrose initiated several training courses for its recruits in the 1970s.

Soon, the business had reached a point where it felt the need for a bigger headquarters and a distribution center. Accordingly, the company decided to open a new head office and warehouse in Bracknell.

Using the opportunity to upgrade and improve its base of operations, this facility was the first of its kind as it contained the UK’s first high-bay warehouse controlled by computers and automated cranes. Waitrose was truly well ahead of the competition with its advanced operations.

Key Takeaway 1: Establish A Unique Brand Identity

For any business to prosper, it needs to understand what makes it stand out from its competitors. For Waitrose, it was the premium quality of its products and services. Hence, it wasn’t any ordinary grocery store.

Known for maintaining its exceptionally high standards through the years, it even caught the royal family’s attention. Naturally, it was the go-to brand for the affluent class who trusted it for its prestigious products.

Simultaneously, Waitrose experimented with self-service stores, giving customers a seamless experience which no store could offer at the time. Thus, the business continued to flourish even after its ownership and business model changed.

Important Milestones In The Journey

One may wonder how a grocery business would incorporate innovation and novelty into its business model. But Waitrose had already shown its potential with the self-service ideas as well as the warehouse run by computers and automated cranes.

Thus, not only did it introduce unique products at its branches but it also capitalized on visionary ideas.

Moreover, after establishing itself on a stable foundation built upon years of exceptional and trustworthy service, Waitrose was ready to consolidate and expand its business.

The following years saw Waitrose prospering on account of its unique business strategies and fresh ideas.

Waitrose’s Firsts

Synonymous with innovation in the supermarket industry, unsurprisingly Waitrose was the first brand to introduce several novel ideas and products at its store

In 1983, Waitrose was the first supermarket in the UK to sell organic produce and has continued to lead the field since then. Currently, Waitrose Duchy Organic is the largest own-label organic brand in the UK. It was formed in 2009 when Waitrose took over Duchy Originals - founded by the Prince of Wales to promote organic farming.

In 1984, the Queen visited Waitrose's Windsor branch on the opening of the King Edward Court Shopping Centre. The royal visit brought a lot of attention to the brand, which was a big deal since the Partnership itself did not invest too much in advertising except for the new store openings.

Waitrose was also the UK’s first supermarket to sell a pre-packaged variation of Japanese-style sushi in 1996. Fast forward to a decade later, and Waitrose also became the first retailer to introduce a freshly-made sushi counter in a select few branches.

Once again, displaying a knack for original thinking, Waitrose introduced the unprecedented “Bag for Life” Scheme. The reusable shopping bag scheme reinforced the company’s image as an environmentally conscious business.

Branching Out

In 2000, Waitrose entered into a branding and sourcing arrangement with Ocado - an online supermarket. Through this arrangement, the company initiated commercial deliveries catering to millions of households.

Ocado-supermarket-deliverySource

Although Waitrose has launched its own delivery service since then, Ocado continues to sell Waitrose products.

Waitrose also incorporated the Leckford Estate into its trading division as Waitrose Farm. Previously the Estate served as a means for food production and a recreational facility for the John Lewis partners.

As Waitrose Farm, it supplied supermarkets all over the UK and helped Waitrose become the first retailer to plant its own vineyard.

Another significant milestone in Waitrose’s expansion efforts was the acquisition of 19 supermarkets from Wm Morrison in 2004. Waitrose could now access locations such as Newark, Harrogate, Hull, and Southport.

These systematic additions to its operations allowed it to strengthen its hold in existing markets and explore the potential in areas previously untapped or not served by Waitrose.

Launching New Brands

Due to its high quality and work ethic standards, Waitrose had developed an upmarket image for itself.,

Thus, in 2008, when the Great Recession hit, Waitrose came at the risk of being considered a “special occasions” retailer rather than a place for everyday shopping. If the business didn’t want this image to stick, it had to adapt and offer what customers were looking for at the time.

As a result, the company launched the Essential Waitrose range, consisting of high-quality everyday grocery items at affordable prices. Its tagline read: “Quality you’d expect at prices your wouldn’t.”

The strategy was a huge success. It brought about a significant increase in sales - up to 14.6% - and helped Waitrose dispel the upmarket label.

In 2010, Waitrose also launched the “Heston from Waitrose” brand in collaboration with the renowned chef Heston Blumenthal. The new range included packaged food with Christmas-themed delicacies, which were highly popular amongst the customers.

The Many Stores of Waitrose

Waitrose decided to capitalize on its contract with Ocado. (which permitted Ocado to deliver from any Waitrose shop within the M25)

As a result, in 2011, it opened its first Dotcom Fulfilment Centre - a dark store - where, instead of customers, staff members would go around picking groceries for online orders.

2008 also saw Waitrose enter the convenience store market. It opened up a small branch in Nottingham, relieving customers of the need to travel to Newark or Lincoln for shopping. This allowed the brand to penetrate smaller markets and add those people to its customer base who preferred shopping at their nearest stores.

Owing to the success of the idea, currently, Waitrose has a multitude of convenience stores spread all over the UK.

Key Takeaway 2: Innovation and Ingenuity Is Critical For Business

Since the beginning, Waitrose has displayed a knack for original thinking and creativity that helped it become a trend leader and stay ahead of the competition. 

Its solution-oriented strategies also helped it successfully overcome challenges such as the decision to launch the Essential Waitrose range to cater to a broader customer base

Instead of imitating existing market norms, Waitrose displayed ingenuity within its business model. This strategy offered great returns to the company by helping establish a unique image and increasing its customer base.

The Waitrose Strategy

Waitrose functions on a unique business model that has substantially contributed to its success. Under the John Lewis Partnership, Waitrose is owned by a Trust on behalf of the Partners.

The business setup is highly unusual but has significant benefits attached to it. It serves as a successful alternative to traditional business structures and offers a better way of doing business.

Waitrose Under The John Lewis Partnership

John Spedan Lewis first came up with the idea of an employee-owned business over a hundred years ago. It was something only a few had heard of at the time and even fewer had known of a company where such a model was implemented.

Lewis wanted to include the staff in the decision-making process of running the business. Consequently, Lewis devised a set of principles on operating the business and composed a written Constitution detailing the rights and responsibilities of the employees as co-owners.

Lewis envisioned a system that was, at once, both commercial and democratic. This way, the company could maintain its competitive edge in the market while also empowering the employees.

The revolutionary business model allows the partners to share in “profit, knowledge, and power.” The Partnership also enables them to voice their opinions to the management through formal democratic bodies.

In 2018, the Partnership felt the need to emphasize its employee-owned business structure to differentiate itself amidst the harsh retail market environment.

Consequently, Waitrose and John Lewis launched a joint marketing campaign, unifying their brand identity by adding "& Partners" to their official brand names. The rebranding highlights their mutual underlying democratic principles.

waitrose-partners-shopfrontSource

Currently, there are two retail brands under the parent company - John Lewis Partnership. In October 2019, the Partnership also announced its plan to organize and manage the Partnership as a single business instead of two separate units.

Waitrose would continue to serve its customers online and in shops; however, a single Executive team will manage and handle the Partnership's business strategy and performance.

Partners Not Employees

The company’s business model entails numerous benefits for the Waitrose staff.

Their status as “partners” rewards them with a competitive amount of pay, a share in the year’s profit, and subsidized shopping at both the Waitrose supermarkets and John Lewis.

The Partners are also entitled to discounted trips to various holiday and leisure destinations. The John Lewis partnership owns around five different holiday centers that are available to the staff at highly subsidized prices. 

Moreover, the company strives to make “sufficient” profit, unlike other corporate entities fixated on maximizing profits. Waitrose, therefore, prioritizes the reinvestment of profits back into its Partners and business.

Waitrose also has its Partners’ health and well-being covered through their free in-house health and medical services. The Partnership annually invests over £20 Million in its Partnership Health Services initiative.

Despite the rough FY 2020/21 (due to the pandemic), the average hourly pay for all non-management Partners was £9.90 - 14% more than the National Living Wage. The company reviews its Partner pay annually and ensures that even the lowest-paid partners make a decent wage.

Key Takeaway 3: Take Care Of Your Own

Waitrose empowers and looks after the needs and interests of its Partners, unlike traditional corporate entities that seek to exploit their employees for the sake of profits.

Prioritizing employee well-being boosts productivity since the Partners understand how their performance directly impacts their shares, bonuses, and rewards. Be it the assistant who would be ever ready to guide customers through the aisles upon seeing them confused or the manager who rushes to the pick-up desk while they shop, Waitrose employees care and it shows - through the brand’s growth and success.

Moreover, Waitrose follows an ethical business strategy that feeds into the company’s performance. It generates good PR and encourages customers to choose Waitrose over other supermarket brands.

Key To Success: Being Ethical And Ambitious

An important factor behind Waitrose’s success is its emphasis on sustainability and conscientiousness. Its business strategy incorporates environmentally friendly practices and takes great efforts to ensure its produce is responsibly sourced. These considerations are the driving force behind Waitrose’s competitive edge over other supermarket brands.

Waitrose Cuts Down On Waste

Waitrose is committed to reducing the use of single-use plastics in its shops and supply chain. It did so by removing unnecessary packaging and replacing them with recyclable materials.

The company achieved the following milestones in its journey to eliminate plastics:

  • Reduced plastic packaging by 4% in 2019
  • Reduced the overall volume of packaging by 2.6% in 2019
  • Replaced all 5p plastic bags at stores with home-compostable alternatives
  • Encouraged customers to bring their own reusable bags for shopping

The Greenpeace plastic footprint league of UK supermarkets has recognized the brand’s efforts as Waitrose took the top spot for the second time in a row in 2021.

Waitrose has also chosen to tackle the global issue of food waste responsible for a significant amount of greenhouse gas emissions.

It was one of the first supermarkets to commit to the Food Waste Production Roadmap designed by the sustainability charity WRAP. The Roadmap encourages businesses to incorporate waste-reducing strategies into their supply chain.

Waitrose successfully turned surplus food from their shops into meals for the deprived in collaboration with FareShare - a charity organization.

The brand also launched the “A Little Less Than Perfect” range that further reduced food wasted because of its unusual appearance. The range still maintained high standards of quality and taste. 

Waitrose also stocks “forgotten cuts” of meat and buys whole animals from its livestock farmers to minimize the wastage of meat.

Responsible Sourcing

In close association with UK farmers, Waitrose is committed to enforcing high welfare standards while rearing livestock to ensure the quality of meat products.

The company adheres to the universal Five Freedoms for animals:

  • Access to fresh water and diet to ensure Freedom from hunger and thirst.
  • Providing shelter and resting environment to ensure Freedom from discomfort
  • Providing swift diagnosis and treatment to ensure Freedom from pain, injury, or disease
  • Providing sufficient space, facilities, and kindred company to ensure Freedom to express normal behavior
  • Enforcing conditions and treatment to prevent mental suffering to ensure Freedom from fear and distress

Waitrose sources its beef from cattle that have spent at least one season on grass. Its pork products come from pigs reared outdoors. Its chickens are from family-run farms with 20% more space than industry standards. 

Animal welfare issues receive priority as they fall under the responsibility of The John Lewis Partnership Ethics and Sustainability Committee that oversees the brand's corporate responsibility strategies

Waitrose's seafood supply chain is also rooted in sustainable fishing practices. It ensures that its own-label canned tuna is certified by the Marine Stewardship Council or pole and line caught.

The company is constantly collaborating with suppliers, NGOs, and the global industry at large to adapt its aquaculture operations in line with the changing dynamics of the world’s oceans.

Waitrose further ensures animal welfare across its supply chain by refusing to buy meat or livestock on the open market. It is committed to only working with trusted farmers who share its values.

Keeping It Fresh

Waitrose strives to offer the best flavor, quality, and value for all its produce - frozen, fresh, or organic. Over the years, it has built partnerships with agricultural experts to ensure the best practices are observed. 

The company meticulously plans the varieties of fruits and vegetables it grows and harvests them at their peak.

Waitrose prides itself on meeting the Leaf Marque Standards for all its fresh fruit and vegetable produce. The Leaf Marque promotes sustainable farming methods, encouraging biodiversity, crop rotation, and improving water quality.

It is the only UK supermarket that operates its own farm - the Leckford Estate, and therefore it understands the importance of sustainable agriculture.

The Waitrose Agriculture Strategy is devoted to introducing regenerative farming techniques - especially topsoil regeneration - improving the water cycle, increasing carbon capture, biodiversity, and resilience against climate change.

Giving Back To The Community

Since 1994, Waitrose has supported Fairtrade - a global movement geared towards securing better prices, safer working conditions, and fair terms of trade for farmers and workers.

Along with a fairer price, Fairtrade Premium entitles the producers to an additional amount to fund community projects - transport, machinery upgrades, health facilities, and workplace training.

The company even set up The Waitrose Foundation to give back to the farmers and workers it relies on for its fresh food and flowers. The purchase of each Foundation product results in 2% of the sale being reinvested into the community it came from to fund local projects.

Key Takeaway 4: Do The Right Thing & Results Will Follow

Being an industry leader in setting standards for sustainable and responsible operations, Waitrose is gaining a niche customer base amongst those who care about a company’s environmental footprint.

By cutting down on waste and unnecessary plastics, Waitrose is cutting down on costs as well. It is maximizing the use of its resources and getting due returns. Ethical practices also generate brand value and improve the company’s image. 

Surviving The Pandemic

The COVID-19 Pandemic has led to drastic changes in the world markets. Consequently, it has significantly impacted the way Waitrose does business. Recent years saw the company make much-needed adjustments to its operations, especially its online business.

Managing E-Commerce

The pandemic impacted our lives in many ways, one of which was the heightened importance of food in our lives. It also ruled out trips to the supermarket, leaving online shopping as the most viable option.

Online sales accounted for 20% of Waitrose sales, with a 238% increase in online wine sales during the pandemic. The company attracted young first-time Waitrose customers through its trial with Deliveroo - delivering up to 650 products in under 30 minutes.

Waitrose also tripled its “Waitrose Rapid” delivery service to accommodate the increased volume of online orders.  However, the increase in online orders for home delivery has also raised the fulfilment costs.

Waitrose even shifted some of its in-store services online such as home interior advice and cookery courses. The company was committed to providing the best online customer experience even during the lockdown.

Dealing With The Negatives

The pandemic negatively affected the world’s economy, with the UK’s GDP falling by 11%. Waitrose also felt its negative impact as it could not pay its Partners a bonus in March 2021.

The company had to prioritize survival and protect the business, and assume enough stability to get back to making sustainable profits. Instead of bonuses, the Partnership introduced a range of policies to reward the Partners’ hard work during the trying times.

It introduced free food on-site and raised the Partner shopping discount to 25% during the three lockdowns. It also made “thank you” payments to all non-management and first-level management Partners who worked during April and May 2020.

Waitrose also had to discontinue some of its stores in areas with a low customer percentage because it could not afford to sustain them through the pandemic. Waitrose instead redirected its efforts towards consolidating its online business.

Key Takeaway 5: Crisis Call For Difficult Choices

Waitrose was able to keep itself afloat during the pandemic because it did not shy away from making difficult choices when the times called for them.

Although the company made the necessary cuts in bonuses, it was proactive in recognizing and rewarding the hard work of its Partners during rough times.

Waitrose’s ability to make critical business decisions without compromising on its core principles is what truly makes it an industry leader.

Summary & Key Takeaways

From owning a small shop in the 1900s to becoming UK’s number one retailer, the journey of Waitrose has been long but inspiring. Its continued efforts of prioritizing its people - i.e., the customers and employees - have helped it garner a special place as a household favorite.

From staff-friendly policies to an efficient and patient customer care department, Waitrose has always created a sense of personalization in its overall experience, which in turn, grasps the attention of the visitor.

Perhaps this is the secret formula of their success.

Growth By The Numbers

 

2021

2019

Revenue

£7043.9 million

£6429.5 million

Workforce (John Lewis Partnership)

80,900

83,900

No. Of Stores

338

349

Key Strategic Takeaways

Over the course of Waitrose’s long, successful journey, the business has shown what it takes to take challenges head-on and apply the best strategies for growth.

Here are the key takeaways of its strategies throughout:

Create A Unique Image In The Mind Of Consumers

Beginning as a small grocery store, there was nothing extraordinary that stood out about Waitrose. But very soon, its extensive list of customers included the royal household of Britain.

This meant that the company had identified what kind of product it wanted to sell and to what class of customers. It offered premium, high-quality products that catered to the preferences of the upper class.

It attached an image of prestige with the brand which was further affirmed by the royal family recognizing its services. Hence, it has played a key factor in Waitrose’s growth since then.

Innovative Solutions and Adapting To Changing Situations

Along with being a prestigious company, Waitrose also displayed an innovative approach from its inception. From being the first store to sell organic foods, sushi, and much to acquiring its own farm and automating its warehouse, the brand always had something new to offer.

This approach also helped it survive difficult times. For instance, during the recession of 2008, where people started considering Waitrose a special occasion-only store, it launched its Essential Waitrose range, targeting customers of all classes with affordable, high-quality daily grocery products.

Hence, the business has continued to strive and thrive based on its out-of-the-box ideas and ability to adapt to the circumstances.

Look After Your Employees

It’s important to offer the best service to customers to keep them satisfied. But for that to happen, a business needs to look after its employees and keep them well-motivated and well-paid.

John Lewis understood this and introduced the profit and ownership sharing model for the company’s employees. Although this was highly uncommon at the time, it worked great in improving worker loyalty, efficiency, and productivity.

By being part owners of the store and being recognized as “Partners” means the staff has a direct interest in the store’s performance. Therefore, this model is a success to this day for Waitrose!

Develop Goodwill To Stand Out

Businesses require capital, a skilled workforce, and quality products to succeed. However, while most enterprises will focus on these three, there is another secret ingredient of success: Goodwill.

Developing a good reputation for Waitrose was one of the top priorities for Lewis. This meant understanding the audience and environment, and displaying compassion and care was a given.

From cutting down waste to introducing the idea of “forgotten cuts”, prioritizing animal welfare to operating its own farm, Waitrose has developed a comfortably high position in the minds and hearts of its clientele.

In addition, as ecological concerns continue to rise and the consumers gain awareness of what should be and what shouldn’t, Waitrose’s historical strategies to stand out as an eco-friendly and ethical organization have given them a jump-start on the ladder of success, placing them ahead of rival firms and especially assisting them in capturing the green target audience.

This has translated into enhanced goodwill, depicted through their high market share.

Difficult Situations Call For Innovative Strategies

The COVID-19 pandemic was a difficult time for most businesses (non-medical) across the globe. However, while most downsized or closed down stores, Waitrose stood steadfast in the face of adversity.

The company’s decision-making was pragmatic yet out-of-the-box as they held out on bonuses to employees but instead offered free on-site food and greater Partner discounts. Their switch to greater delivery via Deliveroo also meant having to develop a thriving virtual presence in a fairly limited time, which albeit costly, helped them regain their revenue footing and generate cash flow.

By adopting a practical and creative approach for the business, Waitrose instead managed to discover a whole new world of opportunities for itself - the market for e-commerce - which shows the potential of great success, even post-pandemic. 

With shops in 332 locations and a workforce of over 50,000 people, Waitrose has come a long way. Upholding creativity, quality, ethics, and strategic thinking, it has paved its way through the ups and downs and created a truly inspiring journey to look up to.

Waitrose proves that while beginnings may be small, the end can be as big as you dream if you have the right people (like Rose and Taylor) by your side and ambitious goals to guide

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