Waitrose has unveiled a new format as it wades into grocery c-store arms race

The store in Finchley features an expanded fresh produce department, upgraded service counters – including a dedicated parmesan section and an aged beef cabinet – and the upmarket grocer’s first-ever chilled wine department.

Waitrose has also used the store to spotlight its growing list of third-party tie-ups, with a Gail’s fresh baked display, cabinets filled with exclusive Crosstown doughnuts and a Caffè Nero stand.

In line with the greater focus on partnerships, the John Barnes store also features Waitrose’s first delivery hatch to facilitate on-demand grocery fulfilment through Deliveroo and Uber Eats made outside store opening hours.

Executive director James Bailey said of the newly refurbished branch: “Waitrose will always offer fantastic food, but the groundwork we have undertaken behind the scenes in recent years means we can now focus on growth through new shops and ensuring our existing ones are providing great shopping experiences that match the quality of our products.

“The transformation of Finchley Road marks the next evolution of our journey to create a great shopping experience for our customers, underpinned by a high-quality product offering tailored to the local area and the quality service we are synonymous with.

“In designing the store, we have taken time to understand how our customers like to shop and used this knowledge to introduce new concepts that will be tested and rolled out nationally as we continue to work towards the Waitrose of the future.”

The new store has received rave reviews from City analysts and is being held up by management as the ideal for Waitrose moving forward.

“The John Barnes store is a very good piece of refreshment,” says Shore Capital analyst Clive Black. “It shows Waitrose is undoubtedly in the midst of a lot of work to improve its operating platform and reducing costs.

“Waitrose is also improving its trading, which is creating a little bit of resource for them to invest more in customer service, which in turn is giving them the heart to get back a little bit more on the front foot with respect to stores.”

After many years of store estate stagnation, Waitrose is once more on the move in the retail property market and will open its first new shop in six years later this year.

C-store arms race

Waitrose has also set its sights on opening 100 new c-stores as part of a £1bn investment in its estate. However, has it left its push into convenience too late – and what does it really mean by convenience?

Waitrose is certainly not the only supermarket player looking to tap into this fast-growing space. Figures from Mintel show that the convenience market grew by 5.3% in 2023 – although that was buoyed by inflationary increases offsetting a decline in sales volume.

While Waitrose’s target to open 100 new c-stores sounds impressive, it would represent only a tiny foothold in an increasingly crowded space.

At present, the retailer has approximately 45 Little Waitrose c-stores, so if it hits its goal over the next five years that would mean less than 150 convenience stores in total.

By comparison, the Co-op already has more than 2,500, Tesco has close to 2,000 and Sainsbury’s has more than 800.

Nor would that figure represent the biggest push into convenience. Struggling grocer Asda revealed plans in February to open 300 convenience stores by 2026, although the retailer has put a hold on these.

Because of the cost-of-living crisis, Waitrose not only has to fight off competition from its main big rivals and other more upmarket players such as Marks & Spencer.

GlobalData senior retail analyst Eleanor Simpson-Gould says this fresh move into convenience is also targeted at fending off encroachments by discounters Aldi and Lidl.

“Convenience stores enable grocers to enter new locations with smaller investment costs than large format stores,” she says.

“Consumer habits are changing, and expediency drives this demand for smaller stores.”

While Waitrose is never going to be able to capture an oversized share of the convenience market, one grocery analyst suspects that’s not what it’s trying to do with this new investment programme.

“Historically, Waitrose has always been terrible at convenience,” one grocery expert says, noting its historical struggles with its estate and availability issues. 

“So, I wonder exactly what Waitrose means when it talks about convenience? Does it want to take 3,000 sq ft little stores? Or does it mean more 10,000 to 15,000 sq ft stores?

“I think the latter because a store of that size allows Waitrose to play to its strengths: the fresh food counters, the bakery and fresh produce, a coffee stand and perhaps a little sushi counter. In that sense, they’d be more like small supermarket formats, compared with traditional c-stores.”

Waitrose’s new format is a big step forward for a retailer that has struggled to carve itself a niche in the UK’s famously crowded grocery market in recent years, although it has enjoyed a number of strong months in Kantar’s grocery market share data.

Whether this proves to be the first step on the road to recovery or another false dawn will partly be decided by how its c-store gamble pays off.