Supermarket Waitrose has reported robust results with increase in operating profit, driven by both volume and customer acquisition growth which in turn has pushed better numbers for John Lewis, bringing its back on track for “significantly higher” profits this year.
The recently released data shows that Waitrose & Partners' performance in H1 indicates a strong positive trajectory towards achieving higher full-year profits. The premium grocer has reported a £75 million increase in operating profit, driven by both volume and customer acquisition growth.
Investment in rolling out price cuts has paid off, enticing shoppers to its stores and promoting value for money in its range. The grocer experienced volume growth of over 2 per cent, a marked improvement from the 1.5 per cent decline experienced in the previous year.
Aliyah Siddika, Retail Analyst at GlobalData, states, "This positive result is a good indicator of the health of the Waitrose proposition, with last year’s figures raised by an inflationary market highlighting it is increasing its appeal to new shoppers while enticing others to trade up.
“As the cost-of-living crisis subsides, Waitrose & Partners has experienced a notable expansion in its customer base as shoppers increasingly treat themselves to the grocer's high-quality, unique products. Waitrose & Partners is strategically leveraging rapid-delivery services such as Deliveroo and UberEats, along with its recent acquisition of meal delivery service DishPatch, to enhance its competitive position against convenience stores and restaurants.
"These enhancements are crucial as the traditional Big Four supermarkets also expand in these areas, and development here will enable Waitrose to remain competitive. Since the last update, Waitrose & Partners has also successfully begun implementing its plan to reinvest in refurbishing and opening new stores, with the Finchley Road store being the first of many planned refurbishments."
This investment will support it in competing with close rival Marks & Spencer, which has refurbished its stores to have a sleek and modern look. Additionally, Waitrose is capitalising on the convenience store trend by committing to opening 100 new locations over the next five years, allowing it to cater to the rise of top-up shopping.
Siddika added, “The premium grocers' continued innovation and collaborations are a unique contributing factor to its success. A prime example is Waitrose's collaboration with renowned chef Yotam Ottolenghi on an exclusive line of cooking pastes, spice blends, and marinades following the positive reception of its Japanese-inspired Menyū range. Leveraging Ottolenghi's culinary expertise and reputation, this collaboration has proven popular, underscoring Waitrose's adeptness at meeting the growing consumer desire for restaurant-quality dining experiences in the comfort of their homes.”
