'As Waitrose’s Bailey checks out, he leaves opportunity for his successor'

After five-and-a-half years in charge, Waitrose managing director James Bailey will leave at the end of September.

Bailey has been a good steward of Waitrose. He has steered it through some of the most challenging times any in retail have experienced – notably the unprecedented disruption of the pandemic, as lockdown was imposed just days before he joined, and the subsequent cost of living crisis.

Over what were a difficult few years for the Partnership, Waitrose’s strengths helped it through as the John Lewis department store arm suffered. And when full-year results were posted in March this year, sales and volumes were up at Waitrose, helping it lift profits substantially.

So Bailey can look back with some satisfaction when he checks out next month. But his successor has an opportunity to put their foot on the accelerator. The latest Worldpanel by Numerator data, for instance, showed market share of 4.4% – no change year on year.

Perhaps part of the reason for that is that Waitrose – in contrast to many retailers – could do with some more shops.

For instance, I’d need to travel 40 miles to a Waitrose. Ok, it’s not an urban area and there are other understandable reasons why it has such a limited presence locally. But all the same, there’s an Aldi, a Lidl, a Marks & Spencer, a Morrisons and a Sainsbury’s within six miles and an Asda and Tesco not much further away.

Waitrose has flagged that it intends to open more branches. As the Partnership struggled, openings were probably not something in Bailey’s gift. JLP chair Jason Tarry acknowledged when he delivered full-year results that there needed to be “considerable catch-up investment in our stores and supply chain”.

Waitrose’s first full-line store in seven years is slated for a 2027 debut in Brabazon, Bristol. In convenience, it opened its first shop in six years last November and set a target last year of 100 more c-stores over five years, including with partners such as Shell and Welcome Break. Is that enough, and fast enough, in a market where rivals already have such a strong presence?

“He deserves congratulations for navigating Waitrose through turbulent times and leaves the grocer well-positioned to launch a new phase. It cannot afford to sit on its laurels in ultra-competitive grocery conditions”

That’s a question for Bailey’s successor – and a thorny challenge, admittedly, given how much the costs of doing business have already risen and worries about the impact of anticipated changes to business rates.

It will be fascinating to see what the Brabazon full-line store looks like. The hope must be it represents a significant step on, because arch-competitor Marks & Spencer has moved at pace to improve its food halls.

Only this week, the theatre and in-store excitement M&S has been creating across its estate was emphasised again with the reopening of the food hall in its Pantheon store on Oxford Street. The bar has been set high and Waitrose, with many discerning shoppers, surely needs to be as ambitious as it proceeds with a store overhaul programme.

Similarly, the quality of Waitrose’s food is widely regarded as high, but is it quite up there with M&S? From the summer fun of its strawberry and crème sandwich to its staple dine-in options, M&S has been setting the agenda.

At the same time, M&S has been building its appeal as a ‘shopping list’ retailer rather than only a treats specialist. Its success is evident in its food numbers as more of its shops carry an offer that can compete with supermarket competitors such as Waitrose.

In his own words, Bailey leaves Waitrose “back on a very strong footing with record customer numbers, strong sales growth and a turnaround in profitability”.

He deserves congratulations for navigating Waitrose through turbulent times and leaves the grocer well-positioned to launch a new phase. It cannot afford to sit on its laurels in ultra-competitive grocery conditions.