Waitrose Jesmond... in Grimsby (23 Aug 2011)

Map blooper stories are always good value, whether it’s because they’ve erased Wales or located Shrewsbury in the middle of a river. Now, potential John Lewis Partners in Lincolnshire may be disappointed to find that Waitrose is not, in fact, about to open a store on their doorstep.

The Partnership’s jobs site highlights upcoming Waitrose locations, including the store in the upmarket Newcastle suburb of Jesmond that is due to open in November. The 7,500 sq ft shop will be the North East’s fourth Waitrose (after Hexham, Eldon Square and Ponteland), but the first to open under the ‘Little Waitrose’ convenience banner.

Existing Waitrose convenience store, Leeds (21 Jan 2011)

However, it seems that not everyone at the Partnership is quite as clued up about the North East. According to the map, Jesmond has been shifted 116 miles down the coast, and is now somewhere near Grimsby in North East Lincolnshire.

I know Grimsby is a major centre for the food industry, but surely the idea is to transport produce from there to the Jesmond store, rather than the other way round?

Existing Kingston store

The much-blogged-about Swedish hardware retailer Clas Ohlson published its sales figures for June yesterday.

What’s interesting is that sales for the UK are now being stripped out from those of Finland, giving us a much clearer idea of how the UK business is doing. Total sales were SEK 442m, of which the seven UK stores accounted for SEK 15m. A year ago, the UK business delivered sales of just SEK 5m, with the June 2010 figures representing a seemingly impressive 176% increase – or 203% in local currency. Sales in Clas Ohlson’s home market of Sweden, in contrast, were unchanged year on year.

The trouble, of course, of eyecatching percentage figures like these is that they are not based on like-for-likes – in other words, the year-on-year comparison takes no account of any stores that may have opened or closed in the intervening period.

To give another example, this is why, at a time when the business is expanding rapidly, the John Lewis Partnership’s trading figures – which again show only the raw increase in sales, not like-for-likes – need to be interpreted carefully. There’s no doubt that both the eponymous department store chain and Waitrose are trading well right now, with the latter’s latest weekly figures, published today, showing a 13% sales increase compared to a year ago. It’s just that once you take out the effect of new stores opened in the last 12 months, the actual sales increase in the established stores is inevitably lower than the headline figure.

Clas Ohlson fascia

Apply this to Clas Ohlson, and you realise that while the June 2010 figures are for seven stores (two of which had, admittedly, only been open for a month), the June 2009 stats are for just two (Croydon and Manchester). On this basis, the threefold increase in UK sales is just about what you would expect, especially since two of the five new stores are the smallest in the estate.

By way of an alternative measure, what happens if we look at each country’s sales figures for June 2010 in relation to the number of stores?

• For the UK, sales work out an average of SEK 2.1m for each of the seven stores.
• Finland has 16 stores and a turnover of SEK 35m – so that’s SEK 2.2m per store, a little higher than the UK.
• There are 42 stores in Norway – with total sales of SEK 182m, that’s an average of SEK 4.3m for each shop.
• The rest of the stores – 56 – are in Sweden. If total sales are SEK 210m, that works out at SEK 3.8m per store.

What does this tell us? Well, it basically confirms the trends that Clas Ohlson highlighted in its own year-end report for May 2009 to April 2010. Here, the retailer notes that “the response from customers to the newly opened stores in the UK has been positive and the number of visitors to date has been higher than the Group average”, but that “the conversion rate and average purchase in the UK have been lower than the Group average, which is generally the case in conjunction with the penetration of new markets.”

Looking forward, the report explains how “Clas Ohlson anticipates that establishing its brand name and position in a completely new market will take time, and that the conversion rate, average purchase and sales will gradually increase in coming years.”

In other words, while the sales densities for the UK stores are indeed currently lower than those of the more established Scandinavian branches, Clas Ohlson’s message is that this is just a normal part of entering a completely new market, and that they’re in it for the long haul.

As more UK stores open, and the Clas Ohlson brand becomes more widely known among British consumers, it will be interesting to see how quickly the UK sales densities can catch up with those in the retailer’s more mature markets.

Waitrose Hopwood Park (14 Feb 2010). Photograph by Mark Leaver

Weekly updates on the status of Waitrose at Hopwood Park Services on the M42 have become something of a habit lately, thanks to the regular MMSs received from Mark Leaver.

Mark’s latest pic shows the store now trading, following its opening on Friday. Don’t read too much into it being empty of customers, given that the photo was taken just before the store closed for the night at 10pm this evening!

If you need a reminder, the pics below chart the store’s quite impressive transformation over the last three weeks:

A week ago... (7 Feb 2010). Photograph by Mark Leaver

Three weeks ago (24 Jan 2010). Photograph by Mark Leaver

The John Lewis Partnership’s latest weekly update for Waitrose notes that Hopwood Park is its “first Welcome Break franchise of the year”, with others due to follow on the M11 at Birchanger Green (February) and the M3 Southbound at Fleet (March). Previously, I remarked upon the importance of Waitrose’s Welcome Break franchises “replicating as far as possible the excellent customer experience and stock availability offered by its regular shops”, and was curious, I guess, about whether the staff at those stores would still be John Lewis Partners, or whether they would be employed by Welcome Break.

Happily, I think I’ve found the answer. Back in April last year, Waitrose’s Commercial Director, Richard Hodgson, explained^{[broken link removed]} that “while the non-management team will be Partners, they will be overseen by non-Partner Welcome Break managers who have expertise in operating in this environment”.

As you would expect from John Lewis, this seems like an eminently sensible approach. Hopefully it will make sure that the Welcome Break Waitrose stores can be responsive to the distinctive environment in which they are operating, while maintaining those core Waitrose values that are at the heart of its employee-owned, partnership model.

Waitrose products

A few days ago, in talking about the closure of the adjacent Oil & Vinegar store, I referred to the Eldon Square Waitrose shop as “often busy, though rarely thronged”. Scrub that – visiting during the afternoon on Saturday just gone, the store was very, very thronged indeed.

My hunch is that the snowy, icy weather may well have encouraged shoppers to abandon their cars, and instead stock up with supplies by bus, by Metro or on foot. That’s certainly what we did, walking into Newcastle city centre rather than trying to go somewhere further afield by car. Indeed, there was a report on BBC News at the weekend suggesting that convenience stores and local supermarkets were among the few retailers doing well during the ‘big freeze’, and Tim Danaher of Retail Week makes similar observations in his own blog today.

When a supermarket is very busy, there’s always potential for the customer to have a very poor and stressful shopping experience. I was pleased, however, to see Waitrose doing all the right things. First, all thirteen tills were open – which is always a good start. Even then, the queue stretched all the way from the front of the store to the back, with maybe 25 people ahead of us. Consequently, a staff member went along the queue, apologising for the wait and handing out Celebrations – a small gesture, but a thoughtful and welcome one. As it happened, the eventual length of wait – at less than 5 minutes – was no worse than I quite often experience in some of the larger supermarkets.

Still, it’s always a pleasure to see top customer service, and it’s easy to see why the John Lewis Partnership has built a reputation for being so good at it.

Waitrose fascia

In recent weeks, hardly a day has gone by without some good news involving Waitrose – if it isn’t stellar sales figures, it’s been news about stocking 100% British own-brand dairy products, snapping up Duchy Originals, selling its products in Boots, expanding its presence in motorway service areas, or planning to ramp up its move into convenience.

Meanwhile, the retailer continues to grow its store portfolio at a rapid rate – now up to 215 shops, including new stores in Winchester, Colchester and Weston-super-Mare within the last six weeks alone.

By and large, the recent Waitrose story has therefore been one of growth and success, with the retailer – and, indeed, the John Lewis Partnership as a whole – very much in the habit of opening stores, rather than closing them.

The Gates Shopping Centre in Durham

Against this backdrop, I’ve always been rather curious about quite what went wrong with Waitrose’s Durham branch, in The Gates shopping centre. A former Safeway store, the 18,000 sq ft branch was acquired following Safeway’s takeover by Morrisons; though considered too small at the time for conversion to the Morrisons format, it was not one of the 53 or so overlapping stores that the Competition Commission had required Morrisons to divest. Rather, the assumption was that it was a location that Waitrose actively wanted.

The Durham store opened as Waitrose, to much fanfare, in November 2005 – not surprising, given that it was the retailer’s first presence in North East England, and at the time its most northerly store in the UK. Barely two years later, however, in January 2008, the store’s closure was announced after it had continually “traded at a loss”.

Echoing Waitrose’s closure of another former Morrisons acquisition, in Southport, in 2006 – just two years after it had opened – the announcement demonstrated how the retailer was capable of decisive action in those rare situations where a store was unsuccessful. However, Waitrose’s thriving store in Hexham – another former Safeway, bought from Morrisons and opened in November 2006 – showed that there was nothing stopping the retailer from making a go of it in the North East.

Waitrose Durham finally closed its doors in August last year, designed to coincide with the opening of a new (but much smaller) store in the Eldon Square shopping centre, in nearby Newcastle. More recently, in May this year, a third North East Waitrose opened in Ponteland, taking the place of the village’s Somerfield (itself a former Safeway). For a Waitrose fan like me, the retailer’s shift northwards is undoubtedly welcome; after all, prior to 2004 there was no Waitrose store more northerly than Newark.

Embarrassingly, until a few weeks ago, I had never paid a proper, sightseeing visit to Durham. So I determined to set out, curious to take a look at the former Waitrose site and to see what had become of it. That sums me up, you see – most people visit Durham to take in the wonderful cathedral; my first stop was a shut-up supermarket.

Wandering from the bus station along North Road and into the The Gates shopping centre, my initial reaction was one of slight bemusement. To me, this end of town felt very much like a secondary pitch, with The Gates’ roster of tenants – Poundland, The X Catalogue Store, Yorkshire Trading Co. – as well as those in nearby streets, not appearing to be the most natural bedfellows for a Waitrose.

Former Waitrose store, Durham (September 2009)

On a Friday towards noon, The Gates was also eerily quiet – so much so that I was able to overtly take a photo of the old Waitrose store (above) without anyone noticing. It was a rather sad sight, really - the store’s frontage was partly obscured by a deserted carousel and stacks of plastic crates (presumably belonging to the adjacent Yorkshire Trading Co.), but no amount of hiding could disguise the fact that this was a very large and very empty unit.

Durham's Prince Bishops shopping centre

My initial reaction was reinforced once I’d crossed over the river, taking the Millburngate Bridge towards Durham’s Market Place and the newer Prince Bishops shopping centre. Where The Gates felt peripheral, the Market Place area – buoyed by the presence of big names such as Bhs, Next, Marks and Spencer and Topshop, as well as lots of street entertainment – felt very much like the heart of the city centre. The area was buzzing and full of people, including plenty of students and visitors.

Durham Market Place

Tellingly, I noted that a Tesco Metro had opened up in the city’s former Woolworths store. You might well wonder, as I did, why Tesco hadn’t simply taken over the Waitrose site instead – essentially, I suspect that it’s because the old Woolworths site is a much busier and more attractive location than that on the other side of the river. Ironically, the old Woolies would probably have been a really good place for a Waitrose too.

Framwellgate Bridge, linking The Gates (behind) to Silver Street and the Market Place

Overall, following my visit to Durham, it seemed pretty clear to me why the Waitrose store had not been the hoped-for success – in short, because of where it was. Situated among the wrong types of shops, on the wrong side of the river, at the wrong end of town, away from the tourist and student hotspots, everything about the location in The Gates just felt wrong. I kept thinking to myself, did Waitrose actually visit this site before signing up for it?

In the right place, I think a Waitrose in Durham could have been successful; after all, other newer stores in the north of England and beyond, such as the ones in Sheffield and Edinburgh, appear to do very well with students and locals alike. As it is, Waitrose’s abortive dalliance with Durham is probably best viewed as a rare, but interesting, blip in the retailer’s recent success story.