Upmarket UK grocer Waitrose & Partners has managed to 'keep its head above water' despite a lack of significant festive promotional activity, retail analysts GlobalData have said.
The comments follow the publication of a trading update from parent John Lewis Partnership, which revealed that Waitrose & Partners saw gross sales up 0.2% in the seven weeks to 5 January, recording sales of £1.05 billion.
Sales for the division were up 0.3% on a like-for-like basis. Online sales rose by 12.8%.
Commenting on its performance, Karla Rendle, senior retail analyst at GlobalData, said that Waitrose is "faring better" than its rival Marks & Spencer, which indicates that "Waitrose has performed relatively well in retaining its core affluent shopper base despite prior assumption that it could be sent into negative growth figures as shoppers switched to the discounters and their premium ranges, such as Aldi’s Specially Selected and Exquisite lines".
Loyalty Focus
She added that Waitrose has "remained focused on providing quality to loyal customers, with product and service differentiation, and limited promotional activity backed up by good availability and efficient operations. It has also seen its online business grow strongly with the channel’s convenience being a major benefit for shoppers at Christmas.
"Shunning volume promotions may have held back sales, but has protected its profits. It is imperative that Waitrose maintains its premium credentials while offering good value, especially as the big four will be slashing prices in Q1 2019."
Waitrose's decision to focus on rewards and incentives for loyalty card holders has proved an "effective strategy" for retaining and rewarding loyalty, Rendle said.
"It also promotes identification with the Waitrose brand, something that the retailer is set to build upon in 2019 with environmental and sustainable initiatives l and an increase in vegan products. With the competition intensifying even more in the grocery sector in 2019, loyalty and brand alliance will be a key factor in driving performance.''
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
