Waitrose To Unveil New Brand Positioning Following Fall In Sales

 Namnews, 16th September 2022

After the release of half-year figures yesterday showing Waitrose had suffered a significant fall in first-half sales, the supermarket’s executive director revealed that a new brand positioning would be launched in a few weeks that will be more “confident and bold”.

The upmarket chain’s like-for-like sales slid 5% to £3.6bn over the six months to 30 July, partly due to tough comparatives with raised demand during the pandemic. However, basket sizes were smaller by nearly 20% as cash-strapped shoppers made cutbacks and shifted some of their spend to more value-oriented retailers.

James Bailey admitted the supermarket’s brand positioning was “long overdue” a refresh, although he noted that it would not be a dramatic change. He said it would move the business to be “more confident and bold about what we do offer our customers and a bit more challenging and provocative in the market”.

Meanwhile, Bailey highlighted that the way consumers are spending is changing as a result of factors such as inflation, with its budget own label range rising in prominence. The Essential range now features in seven out of 10 shopper baskets.

“Customers have been managing spend in lots of different ways, and that’s the beauty of being a supermarket [as] you can offer all those options,” he said.

“We’ve seen a trend of trading into own brand, and especially into our brilliant Essentials range,” noting how customers are mitigating their own costs within Waitrose’s “four walls”.

Bailey said it’s “no surprise” that Waitrose is facing inflationary pressures. However, he claimed the supermarket’s current price inflation is sitting at around 6%, compared to the 12.4% figure cited by Kantar earlier this week.

He said Waitrose is “hopeful” inflationary rises are “running out of steam”, adding that the market acted “relatively rationally”, which is something that is expected to continue.

Commenting on yesterday’s disappointing figures from Waitrose, Freyer-Elgendy, retail analyst at GlobalData, said: “Staying relatively quiet in the face of the cost-of-living crisis for much of the year has come at a cost. Waitrose’s Great September Savings campaign, running both instore and online, promises half price, save one third, 25% off, multibuy deals for selected fresh foods, bakery, essentials, frozen, alcohol and household products. However, amid Asda’s year-long price lock, Tesco and Sainsbury’s Aldi price matches and new loyalty schemes being rolled out over H1, Waitrose has failed to keep up with rivals’ timely responses to the rising pressures on consumer budgets.

“While Waitrose is slightly more protected from the crisis due to a skew in more affluent customers, GlobalData’s retail survey from August highlights that 27.9% of AB consumers will buy fewer items when faced with price increases – a shift Waitrose is already seeing as average transaction values decline. The grocer will see more of its customers become ‘high-low’ shoppers, purchasing treats and premium quality or speciality goods at Waitrose but switching to the discounters or Tesco for everyday staples and household goods. Waitrose will therefore need to justify price points across its full range, carefully market its Essentials label to showcase value and affordability, and encourage dwell time to protect basket sizes from further erosion – the roll-out of John Lewis shops within Waitrose stores will aid this.”