All you need to know about Waitrose…
Waitrose is a chain of British supermarkets and in addition the largest retailer. It operates a total of 353 stores in the UK, including 65 ‘little Waitrose’ (convenience stores), headquartered in Bracknell, Berkshire. Waitrose has an ‘upmarket’ position in England with its 288 supermarkets. They mainly attract people with above average incomes, second earners and young urban professional. A market share of 5.1% (18% organic, 10% fish, +20% meat-free) makes them the sixth largest food retailer.
Waitrose opened a distribution center in West London in 2011, offering an online service to customers in London. With their own delivery service (waitrose.com), they deliver to retailers. Besides West London, they have one based in South London to serve that region. When working with Waitrose, you can ‘easily’ add Ocado (online food distributor, and 2% market share). They have the same terms and conditions as Waitrose. As Ocado is growing with 15% a year, you can cooperate with Ocado exclusively, but there will be a reference to Waitrose. Target group are the DINKYs, Double Income No Kids, and the Singles. These groups have a relatively large amount to spend. The assortment focuses on good quality products and a lot of meat-free, organic and convenience.
What does doing business with Waitrose entail?
A commercial marketing machine: promotions of 4 weeks, ‘buy 2 get 1 free’. These promotions are executed while maintaining their own margin, usually around 40%. So be aware that once you join, you have to take this into account. The margins and your contribution to promotions are of course negotiable, but it is often not that simple. Waitrose runs many of its commercial promotions four times a year, which means you will be involved in the promotion for 16 consecutive weeks – which can be very expensive. This is apart from the marketing budget you need to be on their website, in their magazine or on their social media. Waitrose expects you to spend at least 4 to 7% of your (budgeted) sales with them.
Waitrose uses an excellent operational supply system per store that automatically calculates whether the order unit is sold out before expiration of the expiration date. If it doesn’t, and it sometimes does, the supply system automatically removes you from the ordering opportunity. Getting your product listed again at the store level is subsequently a challenge. This means that the moment you do business with Waitrose, you have to carefully consider how many consumer units will go into your ordering unit: what are your rotation expectations and what adjustment in your ordering unit should you make accordingly? The goal is to keep your distribution rate high. Waitrose in turn expects you, with their fresh products, to deliver to their distribution centers 6 times a week. In short, having a local distributor is very convenient in this regard. Of course you can expect Export Partner to be familiar with more than one of them!
Interested in joining Waitrose?
They are an attractive company, representing the upper end of the market and selling at a reasonable price. It makes a good starting point to get acquainted with the UK market. And with 300 stores, it’s also easy to keep track of. Waitrose is progressive and innovative. Performing successfully at Waitrose gives opportunities for further expansion, as other retailers use them as an example. Furthermore, the partnership with Ocado is interesting: it might not be a done deal yet, but the gate is open.