Yahoo Finance Waitrose in talks to sell groceries on Amazon
Waitrose is in talks to sell groceries via Amazon as it battles to regain market share lost in the cost of living crisis.
The pair are considering a partnership years after the John Lewis-owned supermarket cut ties with Ocado to go it alone online.
Waitrose and Amazon have been discussing a so-called third-party deal, similar to the one struck by frozen foods specialist Iceland in recent weeks.
Amazon is selling the full range of Iceland products and offering free same-day grocery delivery for its Prime subscribers. The “Iceland on Amazon” service is initially being trialled in Greater Manchester before a wider UK rollout.
Amazon also has agreements with both Co-op and Morrisons, where their groceries are sold on its website and are delivered by the US company from local stores. When Co-op initially trialled the service in certain stores in late 2021, it said Amazon accounted for more than 15pc of store sales.
Waitrose’s share of the grocery market has slipped from 5.1pc to 4.6pc since the start of 2020, according to Kantar data. It held 4.9pc of the market when the Ocado deal came to an end.
Analyst Clive Black, of Shore Capital, said a deal with Amazon could “notably add to Waitrose’s online reach” if executed well. He added: “As long as it is not cannibalistic of Waitrose’s own online sales, it could add mid-to-high digit sales to specific stores.”
The talks between Waitrose and Amazon are ongoing and there is no certainty they will result in a deal. Both sides declined to comment.
It comes as Waitrose steps up efforts to reach more shoppers. The Telegraph revealed last month that Waitrose was considering relocating certain stores to better properties as part of a push to grow its market share.
James Bailey, Waitrose executive director, said the supermarket was embarking on a campaign to make its stores better.
He said: “For the last two or three years with Covid-19 and the cost of living challenges – and a little bit before that – we had to be careful about the shops we were investing in.
“Now the partnership is in a position where it’s able to reinvest in that shopping estate from now on, and we’ve got really big, well-thought-through plans about how we go back through the years.” He said this could include relocating stores to more modern buildings.
The drive comes as consumer confidence improves, giving Waitrose a chance to lure shoppers back after months of losing market share to the discounters.
Mr Bailey said: “Customers are reappraising where they go shopping every week, and we are attracting more of those customers back.”
He added that there were plans for “more partnerships so that people who love the product but can’t access the brand can access it through someone else”. Waitrose already has tie-ups with takeaway apps Deliveroo and UberEats.
Waitrose was prompted to rethink its online strategy business in 2019, when Ocado ended a partnership to switch to M&S products. Waitrose products had been stocked by Ocado for almost two decades.
It left Waitrose scrambling to expand its own online arm, particularly during the pandemic when supermarkets had to close their doors.
While online grocery shopping has dipped since Covid, Waitrose said earlier this year that online sales this year represented around 14pc of its total sales. It said shoppers were placing around 168,000 orders per week on average.
A growing portion of online grocery demand is for rapid delivery, with minicabs and cycle couriers picking up orders from Waitrose stores and delivering them in as little as 20 minutes.
In July, Waitrose reported on-demand grocery orders were up by 40pc compared with the previous year.
