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TESCO OR

WAITROSE

When my daughter was moving to London a couple of years ago and we were discussing what area she might find somewhere to live, I vividly remember her response to one putative bolt-hole: "Oh, I can't live there." "Why not?" I enquired innocently. "There's not a Waitrose."
 
This conversation was brought back to me last week, as I sat in the Shepherds Bush branch of their emporium in Westfield - man's latest massive offering to Mammon - waiting for sibling two to complete his chores.
 
I noticed that there didn't seem to be much security: it seemed all too easy to stroll back out the wide aisles that had ushered us in, laden down with unpaid merchandise. I mentioned this observation, and he retorted, "The sort of people who shop here, they don't need to worry about that sort of thing."
 
Which set me thinking. Is there really that much difference between this and, say, the market leader, Tesco (or indeed any of the other competitors)?
 
The background to all this are the comparative Christmas trading statements by the two businesses: Tesco's well-documented fall from grace - a 4% like-for-like decrease in sales over the same period last year (new territory for the relatively fresh Chief Executive, who probably expected the armchair ride bequeathed him by his feted predecessor to continue uninterruptedly for the foreseeable) - contrasted sharply with the continuing rise and rise of the John Lewis Group's operation.
 
So what informs these changes in business fortunes? Is it just the cyclical nature of things? The inexorable truth that what goes up, in however stellar a fashion, must inevitably also come down again eventually, however brilliant and slick the organisation? Or are there some deeper truths to explain what may yet prove anyway to be no more than a temporary blip on one company's long march to total global dominance of all things retail?

WHAT'S THE DIFFERENCE?


I have to confess here that my daughter's prejudice is shared by me. Like many men, I don't enjoy shopping much at all, so when I am forced to participate in the nation's alleged favourite pastime, it tends to be one of those 'rush in, grab what you need as quickly as possible and rush out again' routines.

Food shopping, however, does force you to confront these demons once a week at some emporium or other, and while I am quite prepared to do my weekly purchase of comestibles at other outlets, I am eternally grateful that the closest and most convenient is a Waitrose. Why is that?

I can already hear the cries of, "Pretentious git" and "Middle class tosser" ringing in my in-box, but for me there is a tangible difference.

I notice that a few politicians and left-wing scribblers have picked up on the fact that John Lewis has partners rather than employees, and that all the staff enjoy the fruits of their labours with a year-end share of the company's profits.

This contrasts strongly with the six- and seven-figure paydirt doshed out to the Chief Executive and his boardroom cronies at most commercial enterprises, while the workers are lucky to get a minimal pay-rise (deferred till 2014). But I honestly don't think that this is essentially what differentiates the two operations.

It is true that shopping at Waitrose is a far more middle-class experience. You're unlikely to be sharing a check-out queue with a tattooed lout bearing a basket of lager and turkey twizzlers.

And then the real difference dawned on me.

The Waitrose core proposition is to provide high-quality merchandise in a pleasant environment, with courteous, helpful and attentive service. Ask any staff member a question, however busy or harassed they look, and they go out of their way to be helpful. On the negative side, the reputation is that the store is more expensive to shop at than their competitors. I have no evidence whether this is true or not: but I bet half their customers haven't a clue (and care less) about the individual prices they're paying, as long as they're not stupidly over the top. Indeed the loyal customer base is probably glad of such a reputation, since it's likely to deter the hoi palloi from darkening the doors.

Tesco, on the other hand, bases its proposition (because of its mega status) on being all things to all people. Because it has to position itself as a mass-market supplier, its core values are essentially those of price and promotion. They have built their enormous edifice on non-stop, highly sophisticated and expensive marketing. And because they have to be all things to all men, their core proposition also has to be so universal as to be virtually meaningless. "Every Little Helps." Really, when you consider it in isolation, it's not much of a call to arms, is it?

And you only have to get all that marketing just a little bit wrong, and the whole caboodle starts to shake, rattle and roll, and not in a good way. Whereas if you base your appeal on some solid virtues - values rather than just numbers - you have a good chance of maintaining growth and stability for longer.

The lesson: core proposition ("It's not what you do, it's why you do it," in Simon Sinek's parlance) trumps marketing and promotion in the long term, every time.

David Croydon: 01844 238692 or e-mail dave@hilltopconsultancy.co.uk




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Business Advice Oxford, Oxfordshire