Amazon buying Waitrose ‘would have made sense’

Reports in this weekend’s Sunday Times that Amazon tried to open talks with the John Lewis Partnership about taking over its Waitrose grocery stores could have born rich fruit, says the e-commerce fulfilment expert ParcelHero.

ParcelHero’s Head of Consumer Research, David Jinks MILT, says: ‘Waitrose’s generally well-heeled customer base would be a great fit for Amazon. 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.’

And there is another key reason why a Waitrose-Amazon tie in would work well. Explains David: ‘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, just as Sainsbury’s has with Argos.’

Adds David: ‘A Waitrose-Amazon ‘marriage’ would also mean Amazon 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 there is currently a Waitrose store – and there are over 350 across the UK.’

David observes: ‘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.'

Concludes David: ‘John Lewis directors are saying the approach never got as far as formal talks; and it’s easy enough to see why. 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. And Amazon might be seen as an organisation that would dilute the essence of the Waitrose brand, as some analysts say has happened with its take-over of the upmarket deli chain Whole Foods in the US.

‘But ParcelHero’s recent report, Amazon’s Prime Ambition, discusses how Amazon has used one-hour deliveries to entice consumers into the Amazon Prime fold. The loyalty of Waitrose’s wealthy customer base would be a prize worth spending a considerable sum on. This may not be Amazon’s final attempt.’

For more details about how Amazon ultimately plans to be the pipeline through which consumers make all their purchases, see ParcelHero’s report: https://www.parcelhero.com/blog/news-updates/amazons-prime-ambition-parcelhero-industry-report-2