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Waitrose boss vows to relocate ‘terribly organised’ shops

Waitrose's James Bailey says the company has started its store overhaul programme to make the supermarket ‘more accessible’
Waitrose's James Bailey wants to make the supermarket ‘more accessible’ - Paul Grover for The Telegraph

Waitrose has vowed to move out of badly organised and dated stores as it attempts to become more “accessible” and appeal to a wider audience.

James Bailey, executive director of Waitrose, which is owned by the John Lewis Partnership, said he was determined to make sure the company had its shops located in “the right place in the right postcode” after reining in spending in recent years.

Mr Bailey said: “For the last two or three years with Covid-19 and the cost of living challenges – and a little bit before that – we had to be careful about the shops we were investing in.

“Now the partnership is in a position where it’s able to reinvest in that shopping estate from now on, and we’ve got really big, well-thought-through plans about how we go back through the years.”

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It comes after The Telegraph revealed in March that the supermarket had been cutting costs to free up cash for an overhaul of its 332 stores. Sources said at the time a complete refresh would cost up to £250m, with restructuring experts brought in to help thrash out where costs could be cut to reinvest in ageing stores.

John Lewis is aiming to cut £600m of costs out of the business in the coming years, on top of £300m already cut.

Mr Bailey said he wanted to relocate a number of stores to sites that were more efficient and cost-effective, such as those run using solar energy and fitted with LED lighting. It is understood that some Waitrose stores have not received significant investment in over a decade.

He added: “Most of our shops are in the right postcode, but some of them might be in the wrong place in that postcode. So if you’re a Waitrose shopper and you’re shopping in a high street or some of the older shops, that shop itself might be on three floors.

“It might be really terribly organised and it’s just not a very modern facility to do your shopping in.”

Waitrose is expecting to have roughly the same number of larger stores at the end of the overhaul, although more of the sites will include mini John Lewis stores inside them. It is also pushing ahead with opening more of its smaller convenience stores, which trade as ‘Little Waitrose’.

Mr Bailey said its store overhaul programme was now underway, with the aim of making Waitrose “more accessible and more appealing to more people”.

It has historically been seen as a supermarket aimed at middle class shoppers in suburban towns and villages. However, Mr Bailey said: “This is one of those Waitrose myths that we have a very particular kind of customer and it’s only from certain parts of the country, nobody else.”

Over the past year, he said the supermarket had attracted 800,000 new customers visiting its stores.

Mr Bailey added: “That’s more people from every part of the country, just choosing one or two more occasions to come in to shop with us. That’s solid momentum.”

It comes as executives battle to turn around the wider John Lewis business, amid concerns the retailer has fallen out of favour with shoppers. Forecasts earlier this year suggested that by the end of 2023, Marks & Spencer would leapfrog John Lewis in the rankings of Britain’s largest retailers.

This month, John Lewis admitted its turnaround would take longer than planned.

Under a five-year partnership plan launched in 2020, Dame Sharon White, chairman of John Lewis, pledged the company would make an annual profit of £400m by 2026.

However, Dame Sharon admitted John Lewis would miss that target and said the partnership was unlikely to reach it until 2028.

Mr Bailey said: “I think it’s very sensible and practical to say, look, it has been a couple of unusual years where inflation has been at this level and customer sentiment has been that. The path is still really attractive, but of course it’s gonna take a couple more years. That’s just common sense.”

As well as refreshing stores, Waitrose will be investing more in bringing prices down as part of its bid to revive its fortunes.

Since Mr Bailey took over in early 2020, Waitrose’s share of the grocery market has slipped from 5.1pc to 4.6pc, figures from data experts Kantar show.

Mr Bailey said this was a result of wider economic challenges facing households.

He added: “We’ve got the cost of living challenges that customers have been experiencing in the past 12 or 18 months, and continue to have, and consumer confidence taking such a big knock.

“As a premium brand you’d expect to be slightly behind the value players in the market. That’s okay, we can live with that.”

But Mr Bailey claimed that the supermarket had recently turned a corner, with the number of products sold in its stores no longer in decline.

He said: “Certainly, we’ve seen the discounters attract some customers, but as consumer confidence improves again, customers are reappraising where they go shopping every week, and we are attracting more of those customers back – that has to be true for us to have grown the customer numbers the way we have.”

Waitrose has cut prices on hundreds of products since the start of the year as it battles to win back shoppers.

Despite this, figures suggest it still remains notably more expensive than its rivals. According to consumer rights group Which?, a basket of groceries at Waitrose is more than 20pc more expensive than at Aldi and 11pc more expensive than at Asda.

Mr Bailey said the survey measured price, rather than value which was more important to its customers.

He said: “You’re literally not comparing apples with apples. Which? do a great job, but they are looking at things through one dimension and that’s not how customers think or shop. Some of our confidence comes from the fact that more people are choosing to shop with us.”

Earlier this month, Waitrose warned staff that jobs were at risk as the retailer overhauls its business in an effort to boost productivity.

The supermarket chain told some staff they will need to switch work shifts to ensure that shop floors are adequately staffed during their busiest times.

Mr Bailey said the staff proposals would allow Waitrose to “save money on the things that customers aren’t going to notice”.

He added: “Customers don’t really care how the baked beans get on the shelf.

“What they do care about is, do they see someone when they come in and are they greeted well? Do they have fantastic advice at the counters?”

However, the changes have sparked discontent within the organisation. On a staff forum, some partners reported feeling undervalued in their roles, while others warned that changes to night shifts would mean stores were not fully stocked on opening.

Mr Bailey said he had seen no signs that morale has taken a hit

He added: “Most partners care deeply about the business. Almost exclusively people are saying, ‘this is great, this is galvanising’.

“We are addressing some of the challenges that have been here for a while, and we have to be honest about that. After all, we are co-owners in this business so we have to act like co-owners and think long-term. The opportunity is there, let’s work hard to get there together.”

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