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The Waitrose Company is a UK based retail firm that has existed for almost a century. The company was started in 1904 by Wallace Waite, Arthur Rose and David Taylor. McGoldrick (2002) explains that the retail business is identified as a major economic activity in any nation. In Britain retail stores employees make up for 10% of the general employee population in the country. Over the years Waitrose has grown tremendously in market size. Womack (2011) stated that the company was awarded a royal warrant to deliver such products as wine and groceries to Her Majesty Queen Elizabeth II. It has also been tendered to supply Prince Charles of Wales. The company is a top food retailer operating 262 branches throughout the UK and having a staff of over 37,000 employees (Company History 2011). The stores are located at convenient locations, mostly in South-East UK and they vary in size. In 2008 the company opened a store in Dubai in the United Arab Emirates which was its first store outside the UK. Waitrose’s profits have been phenomenal over the years. Waitrose’s strategy has always been to make high quality products and attract upmarket consumers. Through this and other innovative strategies, the company has soared to unprecedented heights. In this paper the organisational structure, market strategies, successes and failures of Waitrose are investigated. The following literature reviews explore these issues in depth.
The company is owned by the John Lewis Partnership which acquired the enterprise in 1937 (Company History 2011). The company is considered the superstore division of the Partnership. Distribution of Waitrose’s groceries is done by Ocado which is partially owned by the John Lewis Partnership. The company is run by a Board of Directors; among them the Managing Director, who is currently, Mark Price. Other directors are the Retail Director, the Supply Chain Director, the Financial Director, among others. The head office of Waitrose is in Bracknell, Berkshire in England. All employees of Waitrose are considered partners, meaning they are entitled to certain benefits like a partnership bonus and discounts. This means that the company is in a way owned by the employees. Its ownership is a trust held on behalf of the employees. There are no shareholders in the company. The Waitrose Council is responsible for making decisions affecting the company but not commercial ones. Okeeffe and Fearne (2002) elaborate that Waitrose uses the category leadership strategy in its management. Using this system of management, Waitrose’s buying team has been able to link up with the produce growers and the firm’s marketing teams in order to cut costs and boost sales.
Waitrose has made use of information technology to advance its progress. Keynote (2001) explains that Britain has the highest number of online food shoppers than any other country. This has prompted many food retailers to create online shops for their consumers. Online shopping has also been said to have numerous advantages including cheap cost of business, real-time prices and a bigger market (Mahbuhur & Raisinghani 2000). Waitrose has its website (waitrose.com) which was as a result of the combination of ‘Waitrosedeliver’, ‘Waitrose direct’ and ‘Waitrose@work’. The company also has a publication called ‘Foods Illustrated’. All these media are used by the company to advertise and to make their products known. McClellan (2003) asserts that online shopping has become mandatory in some way, since without it, a retailer’s brand would suffer. The Waitrose website thus allows for online shopping which is set to have numerous benefits most notably increase of sales (Hoffman and Novak 1997). According to Felsted (2011) the company has introduced free delivery services for online orders that are above 50 pounds. This is set to act as an incentive especially for new customers more so those from Ocado. Mohammed, Fisher, Jaworski,and Paddison (2003,p.112) explain that Waitrose online shopping employs the differentiation strategy to target the upmarket. They also target busy people who may not have the time to shop and also those people who would want Waitrose products butcannot access a store. In its online shopping venture, Waitrose has tried to capture dissatisfied online shoppers. The website of Ocado (ocado.com) also provides information on the groceries sold at Waitrose. They advertise because they are the groceries supplier.
In the article Waitrose Improves Stockholding, Reduces Waste (2008), the author talks about correct forecast of demand and stocking of goods. It is stipulated that Waitrose is able to achieve these two things through the assistance of SAS. The correct replenishment of stock ensures maximum sales, customer satisfaction as well as reduction of wastage of goods. SAS uses data from the past to be able to predict the demand and thus reduce stockholding and wastage. Wheatley (2001) explains that Waitrose was always investing prior to demand and the disadvantage was that there was no way of finding out whether the right good was at the right place at the right time. This situation many times resulted in substitution which eventually led to stockholding and wastage. This is why Waitrose decided to invest in SAS solutions to avoid this kind of dissatisfaction.
Waitrose stores are located all over the UK and are mostly concentrated in the south. There are also stores in the north as far as Newark. The stores are conveniently located taking into consideration such factors as market, demand and others. Waitrose stores are strategically located in town centres near the most important shopping facilities.
Waitrose just like any other corporation is involved in corporate social responsibility activities. The company has been particularly keen on proper and responsible fishing (Influencing Consumer Behaviour: A Guide for Sustainable Marketing 2011). The company advocates for environmentally safe methods of fishing and it banned unsafe methods such as beam trawling. It has also stopped the sale of threatened species of fish. Waitrose also encourages its suppliers to produce more organic foods (Sharples 2000). The Organic Research Centre (2006) also reports that Waitrose is the only national superstore that supplies organic eggs that are qualified under the Soil Association (SA) standards. This shows the company’s dedication to high quality standards, poultry welfare and the environment. Waitrose is also involved in creating awareness for consumers. The company has done this by encouraging consumers to experiment with other types of fish so as not to put strain on any one species. This concern for fishing has increased sales for Waitrose’s fish and Cave (2010) stipulates that 11% of UK’s fish sales are from Waitrose. The company has also established the Waitrose Foundation which donates some of the profits to African farmers who grow produce sold by the company. This foundation has helped farmers in such countries as Kenya, where some of the flowers from Waitrose originate. Waitrose also engages in a range of activities to showcase their commitment to environmental conservation. They have the ‘Bag for Life’ and ‘Fairtrade Bananas’ and also environmental reports. The company also supports ‘The Prince’s Countryside Fund’ which is yet to be launched. This initiative is predicated on helping vulnerable and rural British farmers and their communities.
Waitrose is also expanding its business. The superstore announced that it plans to open 100 new stores using one billion dollars and create employment for 10,000 people (Waitrose plans 10,000 jobs boost 2011). The plan has been termed ambitious but it has been presented to Prime Minister David Cameron, meaning the company is serious and has put in place the right strategies for implementation. The move has been stated to be beneficial to farmers who will sell more produce to the new stores. Increasing the number of stores has proved to be the only way for Waitrose to increase its market share. Waitrose is also planning to open stores in Abu Dhabi, Bahrain, Oman and the Channel Islands. The retail company is also planning to open a cooking school in London. This new venture is set to bring in more profits for the company.
Waitrose facces major challenges as a key participant in the retail industry. Tan (2002) describes Safeway, Tesco, Sainsbury and others as major competitors of the company. The other retailers keep increasing their stores in the country which poses a major challenge to Waitrose. This is seen through the market share and operating profits of these companies. As at 1997, Tesco had a market share of 23.6% and an operating profit of 760 million pounds; as compared to Waitrose which had only 1.6% of the market share and 74 million pounds in operating profits. One of the reasons for these numbers, was that the other competitors are public plc companies and Waitrose is privately owned. The other factor is that Waitrose has concentrated on food and drinks instead of diversifying. The market share and operating profit figures for Waitrose have increased since 1997, due to opening of new stores. In 2009, the company reportedly had operating profits of 268 million pounds. Nevertheless, there is still stiff competition from major players like Tesco. However, it has been argued that despite the competition, Waitrose still plays fair and distributes quality goods.
Other challenges facing Waitrose is the consumer market. Mark Price, the Managing Director of Waitrose, in an interview (Cave 2010) intimated that most Waitrose shoppers are young people without families and they stop shopping there once they acquire families. It has been stipulated by critics that the prices at the superstore are too high and they drive some customers away. Price wars in the retail market are also common. Hall (2010) explains that retail company Marks and Spencer tried to use Waitrose’s high prices to advertise against them. The press campaign however did not go well as sales at Waitrose increased. Waitrose even expressed that they were grateful to Marks and Spencer for free advertisement of their high-quality goods.
Waitrose Company is clearly a force to reckon with in the UK food retailing business. It has developed since its inception in 1904 and has contributed majorly to the economy of the United Kingdom. It is clear that the company has a creative and novel organisational structure. It has also made use of the differentiation strategy which has made it one of the market leaders. The company has its strengths and weaknesses too. It has a good reputation owing to its high quality standards and impeccable service. Its association with the John Lewis Partnership has given Waitrose a good reputation and has also helped the company achieve major success. Due to the fact that Waitrose employees are also partners in the company, it means that the staff is well motivated. Waitrose also adopts a caring attitude in retailing; this has proved to be beneficial especially because consumers are moving towards ethics. Waitrose was also the first to introduce self-scanning for customers so as to reduce costs and ensure faster customer service. The company has also made use of Own brands, which are brand names owned by the retailer as opposed to the manufacturer. Own brands are beneficial to the retailer in that they can only be obtained at the retailer’s store and only under the brand of the retailer (Keynote 2001). Waitrose has also won accolades such as the ‘Organic Supermarket of the Year’ and ‘Supermarket Wine Merchant of the Year’. The supply of products to royals has also been a sign of excellence and quality for Waitrose. The company has its weaknesses too. It has few stores outside town centres, it is also perceived to have very high prices. The high prices have also been said to drive low earners to stores like Tesco. The assumption is that Waitrose only targets high earners. It also has a market share of 3% which is small compared to its competitors. The low market share has mainly been attributed to the target market of high income earners. Waitrose’s online shopping has also not proved profitable. Despite all this, Waitrose has proved to be successful. It has creative leadership which has led it to its current high-standing position. The company has also stuck to honest standards which was one of the founding principles of the company. With past records and future predictions, the company is set to grow to even higher heights.
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