Blog: Is there a limit to the growth of Morrisons and Waitrose?
Dean Best | 15 March 2010
UK grocers with very different reputations among local consumers last week confirmed just how buoyant their businesses have been during the downturn.
Morrisons and Waitrose both unveiled bumper annual results after enjoying the best of what has been a fiercely competitive food retail landscape over the last 18 months.
Morrisons credited its success on its "great value", while Waitrose, once seen as a retailer that only stocked luxuries to be bought occasionally, said its strong performance had been due in part to the popularity of its entry-level, own-label range, Essentials.
However, for all their strength in the last year or so, both Morrisons and Waitrose face questions over how far they can continue to grow in the months ahead.
Morrisons' strategy of moving from being "national" to "nationwide", as well as its plans to open smaller stores, suggests management is happy to focus on the attributes of its business that helped the company buck the downturn.
Nevertheless, the UK's fourth-largest retailer will face strong competition in those parts of the UK where it is unrepresented - ostensibly London and the south-east of England. Moreover, the perennial questions of when Morrisons will move online, or when it will develop loyalty schemes, will be asked more pointedly when new CEO Dalton Philips takes the helm at the end of the month.
Questions are also being asked of Waitrose's plans for further growth this year. As well as the Essentials range, Waitrose moved to team up with the likes of Welcome Break and Boots and it is deals like these that the retailer's management hope will drive growth this year.
However, Waitrose has ambitions of doubling its market share by 2020 - market share that already stands at a "record" 4.3%. Can that goal be achieved through organic growth or are acquisitions - perhaps of regional retailer Booths - in the pipeline?
Until next time...
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