Upmarket British grocer Waitrose is raising its sights on the number of convenience stores it expects to have by the end of this decade following strong results from early openings, its managing director said.
Mark Price told the Reuters Consumer and Retail Summit on Tuesday he could envisage a chain of 400 to 500 convenience shops, up from an initial goal of around 300.
Strong demand for “food on the go” at lunchtime and at the end of the working day, as well as a trend toward more frequent shopping at local stores, had produced encouraging results for Waitrose’s first 20 convenience shops, he said.
With a stream of non-food retailers going out of business, there was no shortage of sites becoming available, he added.
“It’s early days, but it wouldn’t surprise me if we ended up at 400 to 500 (convenience stores),” Price said.
Britain’s retailers are mostly struggling as shoppers are hit by rising prices and government cutbacks. Floor coverings chain Carpetright (CATVU.L) warned on Tuesday it was braced for two years of tough trading, while grocers Asda (WMT.N) and J Sainsbury (SBRY.L) told Reuters they saw no sign of business improving any time soon.
“2008 was a crisis of confidence, but the economy was buoyed by quantitative easing and other measures that were taken by the government. This year there’s a greater sense of a reality of less income for many people,” Price said.
“But equally, I think there are a lot of people who are taking advantage of all the beneficial things that come from continued, very low interest rates,” he added.
Striking a more optimistic tone, he predicted trading conditions would improve next year, helped by the Olympic Games in London, the Queen’s diamond jubilee and the Euro 2012 soccer tournament.
While interest rates might rise, they were unlikely to increase very much, or very quickly, he added.
Waitrose, part of employee-owned retailer John Lewis JLP.UL, has long outperformed Britain’s grocery market, helped by the popularity of its lower-priced “essentials” range and demand for premium foods as cash-strapped Britons cut back on restaurant meals and spend more time eating at home.
Price said he expected sales from Waitrose stores open at least a year to continue growing at about 4 to 5 percent this year.
As well as expanding convenience stores, the chain plans to step up the number of its supermarkets selling non-food goods, such as kitchen appliances, from less than 20 at the moment.
“I can see that number increasingly quite significantly,” he said, while declining to put a figure on how many of Waitrose’s 257 shops might be fitted out with non-food ranges.
Price said he also hoped to sell non-food goods through Waitrose’s internet grocery business, matching similar plans being drawn up by online specialist Ocado (OCDO.L).
“I’d expect to be able to do that in the next couple of years,” he said.
Waitrose will start expanding its online grocery business in London from next month, after the expiry of a no-compete agreement with Ocado, which mostly sells Waitrose products.
Price said Waitrose would be able to serve the whole London region by mid-August and was confident the online grocery market was growing fast enough for both businesses to thrive.
Source : Reuters