Waitrose store chief James Bailey looks forward to the most profitable year in a decade

For the six-year-old James Bailey, Waitrose was a rare source of exotica in Eastbourne in the 1980s. He says: ‘It felt like another world when I went with my mum. There was always food you hadn’t seen before: chicken kiev, hummus and taramasalata.’

Some 40 years on, he’s now the boss of the posh grocer – and he is still fixated on products that are a little bit different.

From celeriac remoulade to strawberry and pink champagne jam, it is that gourmet touch which sets apart Waitrose from the rest.

He recently added 1,000 lines in a push expected to drive the most profitable year in a decade. But on the back of the cost-of-living crisis which has seen food prices rise 25 per cent, the pinch has been felt even in the aisles of the quintessentially middle class grocer, where customers have been swapping branded goods for own labels and cutting back on the pinot noir.

‘You can’t be disconnected from reality,’ Bailey, 50, says, speaking from the 2,800-acre Leckford Estate in Hampshire which has been farmed by Waitrose since 1929 and now supplies dairy, fruit, wine and rapeseed oil to the business. The supermarket is the only one in the UK to own its own farm.

‘There will be less of the really unusual and esoteric, and more focus on investment in everyday basics. We’ve just introduced Wagyu steak, the best quality on the market. But at around £12 a portion it’s an accessible price.’

Waitrose is part of the John Lewis Partnership, the UK’s largest employee-owned business.

Former Tesco executive Jason Tarry took over from Sharon White as the partnership’s chairman last month. Surely, given his background, he will have some thoughts on Waitrose?

‘Jason is a brilliant retailer with a real affinity for the partnership model and our brands,’ is Bailey’s only comment on the matter. Selling premium goods while staying competitive as price wars rage all around is a fine balance. All the more so when Tesco has boosted investment in its ‘finest’ range and M&S is upping the ante.

For now, it is full steam ahead for Bailey. A £1 billion investment to expand and upgrade the 314-store estate in the next four years will see its Little Waitrose convenience stores double in number to 100.

A further 25 regular stores will also be created. But the locations have yet to be confirmed so it is unclear if they will stray beyond the chain’s South-East heartland.

Based in Essex, Bailey spent 18 years at Sainsbury’s, rising to buying director. He joined Waitrose in 2020 at the height of the pandemic, which segued into the cost-of-living crisis. It was a tough time for Waitrose and the John Lewis Partnership overall, which made a £234 million loss in 2022, though it has since returned to profit.

Market researcher Kantar found that in the four weeks to the end of September, Waitrose sales were up 3.6 per cent year-on-year.

Market share in the past two months has risen to 4.6 per cent. Sales of premium ‘Waitrose No.1’ range rose 34 per cent year-on-year, with coffee and confectionery performing particularly well.

Today’s Waitrose customers mix their shopping across various other supermarkets. Younger shoppers, Bailey says, are drawn to the brand’s ethical credentials.

He is acutely aware of customers’ expectations, which means relentless attention to detail.

Most competitors have shut their meat and fish counters in shops in recent years. By contrast, Waitrose is to upgrade the counters offered in 262 of its shops.

Dealing with ‘someone who cares about the food and can give advice is a really important part of a welcoming, personal service,’ he says.

Bailey is also investing in more self-service tills. This is controversial because some customers dislike them and they have also been singled out as a factor in fuelling the rise in supermarket theft.

Booths, based in Preston, Lancashire, and nicknamed the Waitrose of the North, scrapped nearly all its self-scan stations in November last year after a customer uprising. Bailey says this is not a rebellion he recognises at Waitrose. In fact, he credits the speed and efficiency of self-service tills for bringing in an extra two million customers in the past two years.

He says: ‘Obviously, there’s a vulnerability. Some people are not scanning properly either accidentally or on purpose.’

In terms of crime, however, he says he is far more concerned about the safety of staff. He cites a 15 per cent rise in reported assaults with weapons this year by organised crime gangs.

‘We’ve invested a lot in security including CCTV, body-worn cameras and public display monitors. But the threat from brazen and aggressive gangs is still prevalent in some stores,’ he says.

‘It’s an industry-wide problem that needs industry collaboration before it gets any worse.’

For Bailey, big questions abound over the role of supermarkets in food production. Critics accuse supermarkets of prioritising short-term profitability at the expense of farmers and the environment.

Bailey, however, says grocers can be drivers of change.

He argues that British agriculture has a world-leading reputation and is strong in exports.

These, he says, could be ‘turbo charged’ through less reliance on intensive farming and a switch to regenerative land management.

Regenerative farming places greater emphasis on soil health to make it more productive, tackling issues such as top-soil erosion – the loss of the most fertile layer of soil. With organic farming, it can reduce carbon dioxide emissions and promote biodiversity. Plans for the 2,000 farmers who supply Waitrose to operate in this way within the decade are afoot.

Bailey concedes the cost and time it takes to adapt can be prohibitive. Farmers need support to reduce the financial risk of the move and there is a low level of awareness among customers.

‘If you asked 100 people what they know about regenerative farming,’ he says, ‘I doubt many would be able to explain it.

‘Twenty or 30 years ago we didn’t give much thought to how chickens were reared or where they laid eggs until a couple of pioneering supermarkets decided battery caged hens were not on.

‘Sometimes you need the industry to move things along, give ­customers better information and take the lead.’

In the meantime, the countdown to Christmas is on – the season that ‘plays to Waitrose’s strengths’.

Its festive advert was filmed the week before we speak and he’s naturally tight-lipped about its content and who the star turn is.

‘I hope customers feel more optimistic this year than last Christmas,’ he says. ‘The standard of living is rising again and it’s the most exciting time of the year for selling the best food in the world.

‘I already have my favourite for the festival season; prawn and crab cocktail – it’s delicious.’

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