UK retailer warns of long-term pain if quality takes back seat to price
The Managing Director of upmarket UK grocer Waitrose, Mark Price, has told a business conference that companies long-term goals must not be forgotten in the current climate – as short-term gains to reduce costs continue to take precedence.Addressing top retail property bosses, Mr Price acknowledged that the recession will inevitably have changed the way that they look at and run their businesses. However, he explained the importance of keeping a customer focus and that remaining true to core business values is key to survival.
“Businesses need to make a decision – whether to bring down the cost of business operations, or invest in quality,” he advised. “Bringing down the cost of business can create a vicious circle, resulting in poor quality, dissatisfied customers, and ultimately, less money spent in stores.”
“An alternative is to become more focused on innovation, creativity and growth,” Mr Price noted. “At Waitrose, we remain true to our core values of quality and co-ownership. We invest in our staff as long-term shareholders – giving them a sense of collective responsibility – rather than being driven by the need to deliver short-term gains for external shareholders. These values have served us well in the good times… (and) we believe (they) will be essential to our success in the future.
Mr Price suggested that understanding the customer’s needs beyond that of low prices was a key and would serve businesses well as the turnaround edges closer. “Our customers told us they wanted to see a warmer, more contemporary environment; so we invested £6 million to improve the look and feel of our stores,” he explained. “We have also developed new smaller store formats, designed specifically for smaller market towns and smaller footprints.”
“It is not just cost and profit that drives our business forward. It is our relationship with our staff and suppliers, built on mutual trust and respect, which enables us to continue to deliver quality products to our customers,” Mr Price concluded.