Opinion: Waitrose’s tough decisions are in its long-term interests

The shutters will likely come down on six this year, putting 500 roles at risk.

At the same time, Waitrose is overhauling its in-store management to create a more flexible structure. That will result in 180 fewer jobs through staff turnover, retirements and voluntary redundancies.

While at face value such developments are not what are usually associated with Waitrose – news from the retailer is more typically about tie-ups with Prince Charles or Heston Blumenthal – they seem necessary as the grocer, like others, adapts to a changed environment.

“It’s not as if Waitrose is entirely pulling in its horns. Eight new branches, supermarkets as well as convenience stores, will open this year – presumably with confidence that the locations are right”

A shift was signalled at the interim results last year, when John Lewis Partnership chairman Sir Charlie Mayfield said that, amid the proverbially “challenging” conditions, the focus at Waitrose would be on existing stores and new space growth would slow.

In other words, and as at other retailers, productivity is key to continued success.

The changes will bring uncertainty and worry for affected Waitrose staff, but they look essential.

It’s not as if Waitrose is entirely pulling in its horns. Eight new branches, supermarkets as well as convenience stores, will open this year – presumably with confidence that the locations are right.

As well as operating more efficiently, success will depend on the right strategy.

In his first interview since becoming managing director, Collins told Retail Week at the start of this year that his intention is “to make Waitrose even more ‘Waitrose’”, including through new in-store foodservice ventures such as The Kitchen.

The decision to close stores shows that he is willing to make tough decisions, but he is confident that Waitrose has a unique position in food that can sustain success into the future.

Productivity focus

Improved productivity is a priority across retail and there was some good news this week – the industry is delivering.

Retail productivity growth has been outpacing that achieved across the wider economy, BRC data showed. Companies have invested in new technology and become leaner.

As cost pressures rise and uncertainties such as Brexit loom, there is no sign that life will get any easier for retailers so the productivity push must be kept up.

Next week, retail chiefs from businesses ranging from Asos to Kingfisher, along with the BRC, will meet business minister Greg Clark to discuss the industry’s role in his industrial strategy.

Retail’s productivity improvement will help the Government as it seeks to reduce the gap in productivity between the UK and other countries.

But the Government shows little sign of appreciating retail’s importance to the nation, despite it employing 3.2 million people.

Last week it emerged that retail is classed as a ‘low priority’ industry as Theresa May’s administration ponders how to handle the reality of Brexit.

While retailers must continue to lobby the Government to win the recognition they deserve, at present it seems that they can expect little help – so self-help must remain the order of the day.