Waitrose is planning to launch 5000 new products in the next few months in a scramble to retain its online customers as its Ocado partnership draws to a close.
Online grocer Ocado currently stocks more than 4000 Waitrose products, including its own branded lines, and provides the technology behind its online platform.
According to analysts at Berenberg Bank, this tie-up is thought to account for around six per cent of Waitrose’s sales.
In August Ocado will replace Waitrose with its key upmarket grocery rival Marks & Spencer, swapping its Waitrose range for 6000 M&S products which it promises will be the “same price or lower, and of the same quality or better”.
This could potentially have a major impact on Waitrose’s online operations, so it has launched a major revamp of its online product offering in a bid to prevent its customers from jumping ship to M&S.
In the coming months Waitrose will launch thousands of new and revamped products, the equivalent of just under a third of its 17,000 own-label products, according to The Guardian.
Waitrose is understood to have pumped more than £1 million into its kitchens at its headquarters in Bracknell to come up with the new products.
It has also launched a new advertising campaign “You can taste when it’s Waitrose & Partners” to cement its credentials as an upmarket quality food retailer.
Waitrose has also enlisted the help of Today Development Partners (TDP), a technology business run by Ocado’s co-founder Jonathan Faiman to expand its online operations after August.
This has proven to be controversial move with both TPD and Ocado suing one another amid accusations corporate espionage and conspiracy regarding the companies’ respective deals with M&S and Waitrose.
Last year M&S purchased 50 per cent of Ocado’s UK retail arm for £750 million creating the new joint entity Ocado Retail, set to begin fulfilling online M&S grocery orders for the first time in its history in September 2020.
“While everyone is looking at the potential impact from Ocado’s perspective, we believe investors are failing to acknowledge the negative impact on Waitrose, from ending the Ocado contract,” Berenberg Bank’s retail analyst Thomas Davies told The Guardian.
“This will have a material impact on Waitrose’s owner, the John Lewis Partnership, which is already struggling with margins that have fallen.”