Waitrose saw its total sales edge down 0.2% year-on-year over the seven days to 28 September, although this was a slight improvement on the 0.9% fall the previous week.
The retailer revealed that the cooler and wet weather had prompted shoppers to pick up warming comfort foods, with its Ready to Cook options, prepared meals, pizza and pasta doing particularly well. Demand for warming drinks also rose, with sales of tea and coffee up 13%.
Sales in the ambient category edged up 0.8%, whilst sales in Chilled, Fruit, Veg & Hort., Bakery, Meat, Fish, Frozen and Dairy fell 1%. Sales in the Home & General Merchandise category slipped 3.6%.
Waitrose announced yesterday that it has overhauled its premium No.1 own label range with redesigned packaging and the launch of over one hundred new lines.
Total sales at sister chain John Lewis were up 4.8% over the same seven day period, having fallen 12.4% the week before. The group attributed the improved figure to customer to response to a 20% off promotional Home event, which continues until 6 October.
Meanwhile, it was announced today that Rob Collins will step down as Managing Director of Waitrose next year.
His departure is linked to the group’s new ‘Future Partnership’ plan which includes the introduction of a new management structure for the Partnership. From next year, there will be one Executive Team comprised of seven new director roles with responsibility for the performance and strategy of the whole Partnership. As a result, there will no longer be divisional boards or separate Managing Directors for the John Lewis and Waitrose businesses.
Due to the creation of new cross-Partnership roles and the greater integration of the two brands, the group stated that there will be a reduction of around 75 senior management head office roles from the current total of 225.
Among the new roles created, Paula Nickolds, currently Managing Director of the John Lewis divivision, will become Executive Director, Brand; responsible for Digital, Marketing and Services across the Partnership.
Operations across both brands will be led by Andrew Murphy, currently director of IT and transformation for the group, and Patrick Lewis will continue as finance director. Bérangère Michel will head customer service and Tracey Killen will head people management. Meanwhile, two new directors – for trading and strategy – are being sought.
The company said its new structure, which will come into effect from 3 February 2020, would enable it to speed up the roll-out of better products and services, develop and set strategy across both its brands in one place, speed up decision-making and make internal and customer service systems more efficient. The group also wants to develop shared IT and supply chain platforms.
Taken together all aspects of the plan are expected to lead to an overall cost saving of around £100m over time.
Sir Charlie Mayfield, Chairman of the John Lewis Partnership, said: “Our current structure has served us well in the past, enabling us to develop two of the UK’s most loved and trusted brands. In the last three years we have delivered significant innovation and driven efficiency, maintaining market leading service standards and growing customer numbers.
“However, the lesson of the last two years is that we need more innovation, faster decision making and bolder steps to align our operating model with our strategy. This is what the ‘Future Partnership’ is all about.”
He stated that there will be considerable change in many areas of the Partnership as it brings the two businesses closer together. “These are necessary and these changes will be difficult for some of our Partners and we will implement as carefully and sensitively as we can,” he said.
The shake-up comes just weeks after the Partnership posted its first-ever half-year loss and warned that a no-deal Brexit will have a “significant” impact on the business.
NAM Implications:
- Increased pressure on idea of merging structures…
- i.e. combining two different retail models has to dilute the focus of each…
- …at a very challenging time for Waitrose.
- Key for suppliers to ensure they maintain fair shares of any invest/reward relationships…
- …as they step over the cracks…
