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Waitrose Analysis

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Environmental Fit Analysis

December 2002

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Working for a management consultancy I have been asked to assist Waitrose in the analysis of its current competitive position and its macro environmental situation in order to aid in deciding possible future strategies.

Waitrose is operating in the UK grocery market, which in 2001 was estimated at £103.4bn. Food sales are the core business of the supermarkets and spending on food in the UK has been growing year-on-year since 1990; The market has proved to be very recession proof. However non-food articles account for a growing share. The market is led by the ‘big four' – Tesco, Sainsbury's, ASDA and Safeway. Together with Somerfield, Iceland and Waitrose these companies take by far the largest chunk of the market.

Waitrose, founded in 1904 and owned by the John Lewis Partnership, operates 137 stores, mainly in the south-east of the UK and currently employs more than 27.000 staff. Stores are of small to medium size, conveniently located. The 2001 turnover amounted to £1.98bn (+13%), pre-tax profits to 25.7 million (-15.7%, due to the purchase of 11 Kwik Save stores in 2000). Waitrose is recognized for its focused differentiation strategy targeting the upmarket with a wide range of quality and fresh products.

With the PPG6 it has become difficult to obtain out-of-town planning permissions. This might collide with Waitrose's indicated strategy of opening new Food & Home Supercenters. Customers put more emphasis on healthy eating and organic food and most are opposed to GM-food. Waitrose fully serves this trend with its fresh, quality foods and their ‘Perfectly Balanced' own label. Furthermore the public has become more environmentally aware. Waitrose is undertaking a range of activities to maintain their green image (e.g.‘Bag For Life') and publishes an Environmental Report. Along with other chains Waitrose is selling sandwiches and other ready meals that can be eaten on...

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