Ongoing incursions from retailers

Wandering around the reopened Waitrose store in Finchley, north London, on the preview night, it was clear that the food-to-go element had been turbo-charged and the plan is to feed some of the new innovations in this store into the rest of the retailer’s estate.

Waitrose joins a growing band of retailers looking to grab a greater share of this growing part of the food market. It’s not really surprising when you consider that food-to-go has been on a multi-year growth spurt – enjoying an increase of a hefty 17.5% between 2019 and 2024, with 3.5% forecasted for this year, according to Lumina Intelligence. This outstrips anything that has been seen in the comparatively sluggish supermarket sector.

Taking a tour around the new store with Tina Mitchell, retail director at Waitrose, she told me: “The food-to-go offer had been jumbled around the store, but we’ve now split it out [and placed it together]. It was not that big [for Waitrose] but it’s now fundamental. Combined with the meal deal launched a year ago, food-to-go is an increasing part of the offer, and it will be super important as we open more convenience stores.”

Waitrose last week announced it is planning to open 100 more convenience stores over the next five years as part of a ï¿¡1bn-plus investment in new outlets and shop refurbishments. They will feature elements now being showcased at the Finchley store. These include a Hot Wok ready-to-eat meals counter, two Crosstown doughnuts counters that offer exclusive lines, a new-look Nero coffee station, and an entirely chilled department for beers, wine and Champagne that makes the whole selection ready for on-the-go consumption.

Customers no longer have to wait at home while their tipple chills. There is also a new hot chicken counter, along with a made-on-the-premises baguettes and salads section, which is a first for Waitrose, and it is already being lined up for a roll-out across its portfolio in a move that puts the likes of Pret A Manger in its sights.

It has also become the first UK supermarket to have a dedicated hatch which allows collections of online orders from the likes of Deliveroo and Uber Eats outside the store’s regular opening hours as it is manned 24 hours a day. Grocery delivery through the third-party delivery guys is already an important part of the Waitrose business, and Mitchell can see these orders being supplemented with more food-to-go items as well as pure food-to-go deliveries – especially when there is the opportunity to add alcohol into the mix.

The Waitrose re-opening coincided with WHSmith launching its first own-brand café as it also pushes further into the food-to-go market. The not-particularly-imaginatively-named Smith’s Kitchen opened in Princess Anne Hospital in Southampton and offers a choice of dine-in (there are 26 seats) and take-away options, including the recently launched food-to-go range under the Smith’s Family Kitchen banner, alongside hot and cold drinks.

This new range comprises 30 products including sandwiches, salads, baguettes and wraps. The plan is to roll this offer out across more travel locations in the UK, which represents the engine of the WHSmith business and encompasses more than 590 stores across airports, hospitals, railway stations and other travel hubs.

Retailers’ ongoing moves into the food-to-go arena are undoubtedly being led by the bakery category, and it is this that is powering the overall growth of supermarket Lidl, which has been the fastest growing grocery business over the past 12 months. It felt sufficiently confident about this increasingly important part of its business that it fired a salvo at market-leading food-to-go player Greggs. It ran a print advertising campaign comparing its 39p jam-filled doughnuts with the 95p version at Greggs, in a move aimed at tempting customers away from bakery sector’s 800-pound gorilla.

As retailers increasingly look for areas of revenue beyond their core operations, then food-to-go represents an obvious area that, for now, is offering them outsized growth opportunities compared with traditional retail. Hospitality companies clearly have to consider the threat of ongoing incursions by these retailers, because the size of the overall food-to-go pie is surely finite.

Glynn Davis, editor of Retail Insider?

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.