In an interview in the influential UK newspaper, the Sunday Telegraph, Mark Price, managing director at British up-market supermarket chain Waitrose, divulged some interesting opinions on the future of the retail business.
With 2-3 per cent of all food retailing in the UK now done online, Price recognises the growing importance of web shopping. In a piece entitled 'Waitrose Boss Flags Revolution In Retailing', Price said "The internet is bigget revolution in retailing since self-service supermarkets in the 1950s." He revealed that the average online purchase for Waitrose is £100, five times more than the average store spend of £20. The supermarket chain even has a "dark store" where employees deal only with online orders. As internet retailing grows, the retailer could find itself with more stores with only virtual customers to cater for. Price believes that up to 20 per cent of food retailing will be done online in the future.
In 2007 Waitrose put 1,000 new products on its shelves, but in recent years this number has soared with a new product offering of up to 4,500 SKUs being introduced each year. Depsite the success of the retailer's entry-level own label range, Waitrose Essential, Price said that you get what you pay for and he doesn't believe that cheap 'basic' products can deliver the quality Waitrose customers expect, "A 2p sausage is not value for money. I don't believe in its quality and I don't think you will find it has value or values." Interestingly, the success of the 'basic' Essential range has helped the supermarket compete with rival Tesco on its own label products but the Waitrose boss said the retailer took a lower margin on the range rather than on quality.
Price said retailers have to get beyond the idea that they are mainly distributors of products and should leverage their brand's unique products and relationship with customers to offer a wide range of services as well as providing food products, "Intellectual property is now more important and we have to think about retailers as content providers in which ownbrand is important." (3 Sept)
© 2012 - ESM: European Supermarket
