‘Chubby grocer’ woos the foodies

Waitrose concluded that customers wanted inspiration and ideas on what to buy and eat. They also sought healthy options for evening meals and lunch, more food that was easy to cook and quick to prepare and more seasonal and local produce.

As a result, the Marylebone store – rebranded “Waitrose Marylebone” in recognition that it is part of a local community as well as a big chain – is packed with menu cards and posters telling customers what is fresh and in season. More than 2,000 products have been added to the 12,500-line range and there are ready-to-go food stands with honey and granola or bacon sandwiches for breakfast and an £11,000 top-of-the-range La Cim-bali coffee machine.

By midday, the breakfast area has metamorphosed into a lunch stand offering salads and speciality breads such as ciabatta and focaccia. If it is a success, the best ideas will be rolled out nationally across the group’s 183 stores.

“We want it to feel like a really good food specialist shop, but also a place where you can do your full weekly shop,” said Price.

Pointing to a copy of the communist Morning Star newspaper on the instore newsstand, he joked that the Waitrose workers’ collective is leading a food revolution in the People’s Republic of Marylebone.

It is a bad joke, but he must get some marks for trying – Waitrose is in part owned by its workers through its parent company, the John Lewis Partnership.

Price has chosen the right job – or it has chosen him. A man who clearly loves food and lists going on picnics with his family as one of his favourite pastimes was an obvious choice to replace Steve Esom, who was poached earlier this year by Stuart Rose to head Marks & Spencer’s food business.

But the former Crewe grammar-school boy who nicknames himself the “chubby grocer” has his dad to thank for a career in retailing.

As a student, Price toyed with the idea of becoming a professional golfer or marine archeologist, but his father, a Cheshire cash-and-carry retailer, told him to get a proper job. Price applied to the John Lewis Partnership and Marks & Spencer.

Both companies offered him a job but he plumped for John Lewis because, in his own words, any organisation that owned two golf courses and five ocean-going yachts sounded like his kind of place.

Now, 25 years on, the John Lewis Partnership is still his kind of place. “Would I want to be anywhere else at the moment? No way. I am only in my mid-forties and I am where I wanted to be – with a great role running a great business. I genuinely believe this is the best job in the partnership.”

Price clearly likes money. He jests that the Asda boss Andy Bond should be nicknamed Premium Bond for his big pay packet. Later he joked that, unlike Sir Terry Leahy, the Tesco chief executive, he is not in line for a £12m bonus pot if he does well at Waitrose.

His down-to-earth demeanour and gag-a-minute style belies a serious business brain and a determination to propel Waitrose into the big league.

The partnership’s 10-year plan for Waitrose is to double the chain to about 400 shops – a feat that Price knows will not be easy given Britain’s tight planning regulations and fierce competition from bigger rivals such as Tesco to buy potential new sites. Expanding by acquisition will be difficult, too – Price is reluctant to burden the business with big debts.

But organic growth is just as tricky. Under present planning and competition regulations, even if Tesco has five stores in a town, there is nothing to stop it opening a sixth. Price believes this is unfair on customers, who are denied the choice of shopping at a wide mix of different supermarkets.

“There needs to be greater equality for food retailers. It is not my job to tell the Competition Commission what to say or do – all we can do is tell them about the challenges we face,” he said.

The Waitrose store-opening programme will be complemented by growth in three other key areas – international, e-commerce and hospitality. Waitrose already exports its products to 23 territories, including Hong Kong, the Caribbean and India. It sells its products overseas through local supermarket chains, and Price believes there is scope to expand this substantially. Two weeks ago he flew to Shanghai to test the water for a possible Waitrose food partnership in China.

“We don’t want it to be a distraction, but international is currently less than 1% of sales. There is real scope to grow that very substantially,” said Price. “India alone has the potential to be very big for us.”

He sees online as a big growth opportunity, too. The John Lewis Partnership owns 25% of Ocado, which delivers Waitrose products direct to people’s homes from a centre in Hat-field, Hertfordshire. But Price thinks there is scope to develop Waitrose’s wholly owned internet business, Waitrose Deliver, which predates Ocado. “We have a store-based pickup model and a shop-and-drop facility as well,” he said.

Experimenting with hospitality services is also on the agenda. Could we see Waitrose supplying the Wimble-don tournament next year? Price just grinned, but he was obviously thinking, “why not if it’s possible?”

His challenge will be to grow and improve the company at the same time as boosting productivity.

Price said that head-office costs had drifted up during the past two or three years and the Waitrose head office, with more than 1,500 staff, now proportionally costs 30% more than at rival supermarkets. His job is to fix that with the least pain.

“Does it mean that people will lose their jobs in head office? No. But we will look at not adding to the cost base in future as we grow, and recognising that we are too heavy. But we don’t want any knee-jerk reactions.”

One thing he won’t be doing to help the bottom line is selling off the supermarket’s property.

“If I was doing a private-equity play it might be different, but do I want to take a short-term view and sell our property off in return for higher operating costs in five years? No.”