More Waitrose store closures may be on the way as the supermarket chain’s owner, John Lewis, signalled it was looking for new avenues of growth, including selling its food in other retailers’ stores and turning surplus shop space into housing.
Sharon White, who took over as chairman in February, has embarked on an overhaul of the retail group, which has suffered a collapse in profits.
This month the company said it was closing eight of its 50 department stores, including large outlets in Birmingham and Watford, with the likely loss of 1,300 jobs.
“We expect to see continued rebalancing of [Waitrose] stores, opening new ones where we see strong customer demand, and potentially closing others where demand wanes,” said White as she updated the group’s 80,000 partners, as staff who work for the mutual are known, on the progress of a strategic review begun in March. “Our existing stores will be updated to meet customers’ expectations.”
The retailer said it would also consider expanding into other areas such as services and even housing.
As it looked to reduce the size of its chains it wanted to put “excess space to good social use” White said. “We are exploring with third parties the concept of new mixed-use affordable housing.”
Waitrose has announced three rounds of store closures in the past two years, with a total of 17 of its supermarkets closing. The lockdown has fuelled the growth of online food sales and Waitrose expects its website to grow rapidly to account for a fifth its business, compared with 5% currently.
White said the retailer wanted to make Waitrose products, which include the upmarket Duchy Organic and No 1 brands, available elsewhere.
She suggested the convenience market could be as a focus of this push because Waitrose had less of a presence in this area. It would also start stocking Waitrose products in more John Lewis shops and vice versa.
Another potential growth area it identified was horticulture, and the company said it was examining how it could build a new business out of prize assets such as the Leckford estate – the 1,600-hectare farm near Stockbridge in Hampshire that was home to the company’s founder, John Spedan Lewis, who signed away his ownership rights to create the partnership.
White previously warned the company was unlikely to pay its annual staff bonus next year as its grappled with self-inflicted problems as well as those caused by the coronavirus pandemic, which forced its department stores to close for several months.
The annual payout – which distributes the same proportion for everyone from the chairman to shelf stackers – is regarded as a key part of the employee-owned group’s culture.
“As you all know, these are testing times, with profits this year and next likely to be challenged,” said White in the update, which also tried to strike an optimistic note about the group’s future.
“But the beauty of being a partnership is that we are able to take a long-term view. The strategic review should see green shoots in our performance over the next nine to 12 months, and our profits recovering over the next three to five years.”
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