Waitrose store boss James Bailey is looking forward to his most profitable year in a decade

For six-year-old James Bailey, Waitrose was a rare source of exoticism in Eastbourne in the 1980s. He says: “When I went with my mother, it felt like I was in another world. There was always food you hadn't seen before: chicken kiev, hummus and taramasalata.

Some 40 years have passed and he is now the head of a fancy grocery store – and he is still obsessed with products that are a little different.

From celery remoulade to strawberry and pink champagne jam, it's the gourmet touch that sets Waitrose apart from the rest.

It recently added 1,000 lines, which is expected to be its most profitable year in a decade. But with the cost of living crisis sending food prices up 25 percent, the pinch was being felt even in the aisles of typically mid-range grocery stores, where customers were swapping name-brand goods for private labels and scaling back to pinot noir.

“You can't disconnect from reality,” says Bailey, 50, speaking from the 2,800-acre Leckford Estate in Hampshire, which has been farmed by Waitrose since 1929 and currently supplies the company with dairy, fruit, wine and rapeseed oil. The supermarket is the only one in the UK that has its own farm.

“There will be less of what is truly extraordinary and esoteric, and more of an emphasis on investing in the basics of everyday life. We have just introduced Wagyu steak, the best quality on the market. But at around £12 per serving it's affordable.

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

Former Tesco executive Jason Tarry took over as the company's CEO from Sharon White last month. Surely, given his background, he will have some thoughts about Waitrose?

“Jason is an outstanding retailer with a strong commitment to the partnership model and our brands,” is Bailey's only comment on the matter. Selling premium goods while remaining competitive in the face of raging price wars is a fine balance. Especially since Tesco has increased investment in its “best” range, and M&S is upping the ante.

For now, Bailey is in full swing. The £1 billion investment to expand and modernize the 314-store complex over the next four years will see the number of Little Waitrose convenience stores double to 100.

Another 25 stationary stores will also be opened. However, locations have not yet been confirmed, so it is unclear whether they will expand beyond the southeastern heart of the network.

Bailey, who lives in Essex, spent 18 years at Sainsbury's before becoming purchasing director. He joined Waitrose in 2020, at the height of the pandemic, which turned into a cost of living crisis. It has been a difficult period for Waitrose and the John Lewis Partnership more generally, which made a loss of £234m in 2022, although it has since returned to profit.

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

Market share has increased to 4.6 percent in the last two months. Sales of the Waitrose No.1 premium range increased by 34 percent year-on-year, with coffee and confectionery performing particularly well.

Today's Waitrose customers combine their purchases at a variety of other supermarkets. Bailey says younger customers are attracted to the brand's ethical values.

He knows his clients' expectations perfectly, which means constant attention to detail.

In recent years, most competitors have closed their meat and fish stands in stores. Waitrose, in turn, is to modernize the counters offered in 262 of its stores.

Connecting with someone who cares about the food and can give advice is a really important part of friendly, personal service,” she says.

Bailey is also investing in more self-checkouts. This is controversial because some customers don't like them, and it has also been cited as a factor driving an increase in supermarket theft.

Booths, based in Preston, Lancashire and called Waitrose of the North, closed down almost all of its self-scanning stations in November last year after a customer revolt. Bailey says it's not a rebellion he sees at Waitrose. He credits the speed and efficiency of self-checkout systems with bringing in an additional two million customers over the past two years.

He says: “Obviously there is a security hole. Some people don't scan properly, either accidentally or on purpose.'

However, when it comes to crime, he says he is much more concerned about staff safety. He cites a 15 percent increase in reported gun attacks by organized crime gangs this year.

“We have invested heavily in security, including CCTV, body-worn cameras and monitors for public use. However, some stores are still under threat from brazen and aggressive gangs,” he says.

“This is an industry-wide problem and requires industry cooperation before it gets worse.”

Bailey has lots of questions about the role of supermarkets in food production. Critics accuse supermarkets of prioritizing short-term profitability at the expense of farmers and the environment.

But Bailey says grocery stores can be a driver of change.

It says British farming has a world-leading reputation and a strong exporting presence.

He believes they can be “turbocharged” by reducing dependence on intensive agriculture and switching to regenerative land management.

Regenerative agriculture places greater emphasis on soil health to make it more productive, solving problems such as topsoil erosion – the loss of the most fertile layer of soil. Through organic farming, it can reduce carbon emissions and promote biodiversity. There are plans for the 2,000 farmers who supply Waitrose to operate this way over the next decade.

Bailey admits that the costs and time needed to adapt can be prohibitive. Farmers need support to reduce the financial risks associated with moving, and awareness among customers is low.

“If you asked 100 people what they knew about regenerative agriculture,” he says, “I doubt many people would be able to explain it.

“Twenty or 30 years ago, we didn't think much about how chickens were raised or where they laid their eggs, until a few pioneering supermarkets decided that chickens kept in battery cages were no longer available at all.

“Sometimes it takes the industry to move things forward, provide customers with better information and take the initiative.”

Meanwhile, the countdown is on to Christmas – a season that “plays to Waitrose's strengths”.

Its Christmas ad was shot a week before our conversation, and he naturally remains tight-lipped about its content and who will become the star.

“I hope that customers will be more optimistic this year than last year,” he says. “The standard of living is rising again and this is the most exciting time of year, selling the best food in the world.

“I already have my favorite for the festival season; shrimp and crab cocktail – it's delicious.

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