Fortnum & Mason CEO Tom Athron is confident an increased focus on food, sustainability and cooking experiences will help the 316-year old luxury grocer remain relevant during a cost of living crisis, and beyond.
Today sees the long-awaited reopening of the third floor of its Piccadilly flagship department store, in what Athron descibes as the ”best expression” of his strategy for the department store to date.
The space has been refitted with a live cooking studio studio-cum-development kitchen, a gin distillery and zone for creating customisable hampers. New cookware ranges and cookbooks will also be on sale from the space, which has full broadcast and streaming capabilities.
“The reality is, when we do the analysis on our customer base, they are telling us that they are increasingly interested in food,” Athron tells The Grocer. “Not just eating food but preparing food. They’re interested in understanding where that food comes from.
“It’s actually not so much about attracting a younger customer base. It’s about making sure Fortnum’s remains really relevant in a world which is changing super-quickly.”
Grocery price inflation rose to 17.5% during the four weeks to 19 March, a new high according to the latest grocery market share data from Kantar, further squeezing household budgets amid a cost of living crisis.
However, Athron categorically rules out the idea that the luxury grocer would abondon its principles in response, and has no plans for widespread price cuts or a more value-focused range.
While the business been less exposed to rising prices than others, due in part because it sources around 85% of its products from the UK, Fortnum’s has seen a general rise of between 5% to 10% on some lines.
While Fortnum’s has, like others, been “very judicious” about which costs to pass on, “that’s just not our focus,” Athron explains. Instead, his focus is on Fortnum’s “extraordinary food and drink” and doing what it does “brilliantly”.
“I don’t want to be for everyone, but I do want Fortnum’s to be for anyone. Anyone who’s interested in food and anyone who is interested in food experience and everything that sits around food and drink and joyful living. I think there’s a big enough market for Fortnum’s to operate.”
It’s set to be a busy 2023 for Fortnum’s
Latest results suggest that is starting to bear fruit, with the company back in the black, following struggles during the Covid-19 pandemic.
Profits grew to £6.1m in the 52 weeks to 10 July 2022, which culminated with the late Queen’s Platinum Jubilee. That was up from a £2.7m loss compared with the previous period.
It’s set to be another busy year for the ‘Royal grocer’, which is gearing up to mark the coronation of King Charles III in May, with the launch of special Coronation Collection that includes an organic darjeeling tea, infused biscuits and a coronation tea towel in Fortnum’s turquoise blue branding.
The Three & Six cocktail bar, also on the third floor, is set to reopen next month, and Athron sees a growing opportunity overseas as its Hong Kong store gradually returns to normal service after lengthy Covid-19 lockdowns.
He also provided an update on the revival of its European operations, with plans to resume normal service “in time for Christmas”.
Fortnum’s abandoned exports to the continent – which accounted for around 5% of its revenue – in March 2021 due to post-Brexit customs challenges. Athron first revealed to The Grocer in January that Fortnum’s has been developing its own warehouse and logistics infrastructure in Europe, and had relaunched a limited ranch of 40 products, through German catering company Trabitsch.
While the details are still being worked out, the available range will be much wider, Athron says.
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