Waitrose is to open its first new stores for nearly a decade following JLP’s return to profit.
The supermarket pledged to invest up to £1bn over the next four years into its store footprint, after growing sales and helping JLP bounce back into the black. That will come alongside investment in technology, automation in its supply chain and customer service.
As part of the initial plan, Waitrose – which currently has 329 shops – will modernise around 80 of its existing stores. It also plans to add a “pipeline” of new stores by the end of the year and beyond, with property teams currently assessing suitable sites. The rollout would include a mixture of Waitrose supermarkets and convenience stores, it said.
“We know what our priority catchments are, we know our headroom,” Waitrose executive director James Bailey told The Grocer, adding that Waitrose’s customer feedback indicated there were “lots of customers out there that want a Waitrose near them”.
“We are very confident that we’ll be announcing some of those new shops, especially Little Waitrose, in the year, and then some of the bigger normal size Waitrose further forward.”
Bailey said early catchment work indicated potential for “at least” 25 to 30 premium Waitrose stores, and “at least 300” Little Waitroses in the future.
“Sometime in the far distant future, maybe those numbers will arrive, but we’re really ambitious because that demand is out there,” Bailey said.
Waitrose would also work to expand the number of third-party wholesale partners it worked with, he added.
The modernisation work would focus on improving the store experience, for example adding lighting and making the most of features like counters, which remained a key point of difference for Waitrose, Bailey said.
Bailey was speaking after 2023 annual results showed improved performance at Waitrose, after a couple of years in which its lost market share and customers to rivals during the cost of living crisis.
Sales grew 5% to £7.7bn in the year to 27 January 2024. The supermarket attracted one million more shoppers to its stores, which saw operating profit grow £170m to £1.06bn.
The strong performance helped the John Lewis Partnership return to profitability after two years of consecutive losses. Pre-tax profits were £56m from a £230m loss the previous year.
Read more: Waitrose ‘back to basics’ store approach bodes well for JLP’s turnaround
Despite the improvement, the partnership would not pay its annual partner bonus, said JLP chair Sharon White. Instead, money would be invested into raising pay and improving its John Lewis and Waitrose shops, as part of a rejigged strategy that would “unashamedly” focus on retail.
Waitrose investment in lowering prices over the past year, and a new £30m investment in February, had worked to win back customers, Bailey said. They had also returned because of work Waitrose had done to improve the experience in stores, he added.
Waitrose had achieved record availability over the second half of the year after “nearly completing” a four-year programme to upgrade its stock management system. It has also been rolling out a wider readjustment of working hours among store staff, as part of its Simpler Shops programme.
“It’s a well trailed fact that we’ve not invested as much as we would have liked into stores over recent years and now we’re able to do that,” Bailey said.
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