Marcus Leroux, Retail Correspondent
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Waitrose is aiming to double the number of its grocery stores by making a push into the convenience market, the company revealed yesterday. Its food will go on sale in Boots as part of the plan.
The employee-owned retailer said there is potential to open up to 300 convenience stores. This would be boosted by the huge store portfolio of more than 2,000 outlets owned by Boots. In return, Boots’ health products will be sold by Waitrose.
Boots, a subsidiary of Alliance Boots, the private equity-controlled company, is believed to be seeking ways of putting distance between itself and the major supermarkets. They have been allowed to sell a wider range of pharmaceuticals under recent deregulation.
Waitrose also plans to roll out its motorway service station partnership with Welcome Break to a further nine locations.
The chain, part of the John Lewis Partnership, has been the best performer among Britain’s main supermarkets since the introduction of its Essentials value range in March. But the supermarket has identified 6.5 million consumers who live out of reach of its stores.
Mark Price, managing director of Waitrose, said: “It’s a huge development for us and will take us to parts of the country we were hitherto unable to access.” Recently, he negotiated an exclusive distribution deal with the Prince of Wales to stock the Duchy Originals brand.
Waitrose is the latest supermarket to move into the burgeoning convenience market. The Co-operative Group controls about 25 per cent of the market following its acquisition of Somerfield.
The sector is increasingly lucrative because it is growing more quickly than the grocery market as a whole and because independents, which still make up 24 per cent of the market, are in decline. About 1,250 of them closed in the past year, according to IGD, the retail analyst.
Of the leading grocers, only Asda is eschewing convenience stores. Andy Bond, chief executive, has said he is “agnostic” on convenience.
J Sainsbury this year raised £400 million to accelerate the rollout of its stores. Under Justin King, chief executive, Sainsburys has increased its convenience presence.
Waitrose’s move will put it on a collision course with Wm Morrison, which has similar ambitions to increase its number of smaller stores. Morrison, like Waitrose, has developed a smaller format with a large fresh food offer to help to establish it in parts of the country that it has been unable to reach.
The Waitrose move will trouble campaigners who complain of the homogenisation of the high street. Tesco, in particular, has drawn fire for driving out local independent businesses. The company argues, however, that Tesco Express stores can rejuvenate troubled secondary retail locations by attracting shoppers.
Separately, John Lewis opened its second-largest department store yesterday. The outlet, its first in Wales, anchors the St David’s 2 development and welcomed thousands of shoppers on its first day of trading.
At the opening, Andy Street, managing director of John Lewis, said: “We can have 170,000 square foot of selling space because we have the sales density. We are expecting a small knock-on effect on the Bristol store. But at the moment South Wales leaks spending out of the region across the bridge [to Bristol]. This will stem the flow.”
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