While the John Lewis Partnership has denied suggestions that online giant Amazon made a bid to purchase Waitrose last year, that hasn't stopped industry experts from speculating on what such a tie-up could look like.
According to last weekend's Sunday Times, last November, Amazon approached John Lewis's management about acquiring the upmarket grocery banner.
This claim has since been vehemently denied by the high-street retail group.
"These times are ripe for speculation, but there has been no approach to the partnership by Amazon regarding Waitrose, and nor would I expect there to be," Charlie Mayfield, chairman of the John Lewis Partnership commented in a statement seen by ESM.
Major Move
According to David Jinks, head of consumer research at online fulfilment firm ParcelHero, were the two retailers to come together, the creation of a 'Waitrose Prime Now' service would be a masterstroke for Amazon, particularly in the London area.
"Waitrose’s generally well-heeled customer base would be a great fit for Amazon," Jinks commented. "These are the kind of consumers who are willing to spend extra to receive quality groceries at a time that’s most convenient."
"That means they would be a natural fit into Amazon’s Prime loyalty programme to ensure same-day, flexible grocery delivery times, and that’s the real goal for Amazon, as Prime members spend twice as much as non-members with the e-commerce giant."
Amazon Prime Now specialises in one- or two-hour deliveries, depending on postcode, and were a Waitrose-Amazon 'marriage' to materialise, the online player "could greatly expand the range of its Fresh and Prime Now grocery delivery services – many of which are restricted to a handful of major urban areas – into the many towns where is currently a Waitrose store".
Waitrose operates some 350 stores across the UK. Amazon recently reported a 43% increase in first-quarter revenue.
General Merchandise
"Amazon could use the Waitrose stores much as Sainsbury’s has used Argos, easily integrating Amazon’s general merchandise e-commerce business into a supermarket," commented Jinks.
"In terms of grocery deliveries, Waitrose was a pioneer with its Ocado-based services, but that relationship went rather sour, and in recent years, Waitrose has slightly lost its way in the grocery delivery revolution. Amazon’s infrastructure could transform the delivery choices Waitrose offers its customers," he added.
As to the John Lewis Partnership's denial that any formal talks took place, Jinks added that it's "easy to see why" nothing materialised, saying, "The current Waitrose-John Lewis tie-in makes too much sense, as it gives the partnership protection if one sector does less well than the other on the high street, just the same way as M&S have a department-store/food-store balance.
"Amazon might be seen as an organisation that would dilute the essence of the Waitrose brand, as some analysts say has happened with its takeover of the upmarket deli chain Whole Foods in the US," he said.
ParcelHero has published a report on Amazon's ambitions for its Prime service, which can be found here.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
