Business | Economy
Waitrose still holding its own in a shrinking market
Managing director insists customers not switching to Sainsbury, the closest competitor, despite data showing fall in market share
- By Elizabeth Rigby, Financial Times
- Published: 23:35 November 24, 2008
London: Waitrose has hit back at rivals' claims that Britain's most upmarket food store is losing customers to cheaper chains, arguing that it is still holding its own in spite of the downturn.
Shrugging off data that show a fall in Waitrose's market share in recent weeks, Mark Price, Waitrose managing director, insisted that he was not losing shoppers to J. Sainsbury, his closest competitor among the UK's four largest supermarkets.
"It is not Waitrose in isolation [that is losing market share]," he said in an interview with the Financial Times.
"All the big players apart from Asda and Morrison [are losing market share] and what I am reflecting here is that we are not losing customers to Sainsbury. That is simply not true."
His swipe at Sainsbury comes after Justin King, its chief executive, told the FT earlier this month that its smaller rival, alongside Marks and Spencer's food business, was "suffering" in the current market.
The latest industry data from TNS show Waitrose's market share fell from 4 per cent to 3.8 per cent in the 12 weeks to November 4, compared with last year. TNS said that Waitrose had seen its growth rate fall back progressively for the past eight quarters, with total growth standing at 1.3 per cent year-on-year.
Sainsbury, meanwhile, has seen its market share fall just 0.1 percentage points to 15.9 per cent on the year. Analysts had expected the chain to be hit harder by "downtrading" as shoppers sought cheaper deals from the likes of Asda and Morrison, as well as the discounters Aldi and Lidl, but so far this fear has not been borne out.
Price, who has added eight Waitrose stores to his 194-strong chain since February, said that the reason his market share had fallen was because the retailer had invested £45 million (Dh248.52 million) in price cuts during 2008 to help out consumers.
Having invested £30 million in cuts over the first half, Waitrose began another price investment round after the summer when underlying sales fell by up to 1.5 per cent during September. It is now running promotions on 700 out of 15,000 lines in stores, compared with 400 a few months ago.
Quality
"Our consumers are spending less. That is not about us losing share, it is about them getting better value from Waitrose.
"I still think there is a place for price and quality. A pint of milk in Waitrose costs the same as elsewhere. If you want to buy cheap food you can buy cheaper food elsewhere... If you want to buy fresh meat, Tesco will sell cheaper meat."
Waitrose's underlying sales are down 0.7 per cent in the 16 weeks to November 15. But the weekly figure was down 4.6 per cent, compared with this time last year when Waitrose held a wine and champagne festival, which produced a spike in sales.
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