Those customers who own a Waitrose loyalty card will be able to take part in the pick your own offers initiative. There is a list of 950 items from which they can choose their discounted items, including eggs, toilet roll, biscuits, buffalo mozzarella, parma ham and sushi.
During a trial run, toilet roll turned out to be the most popular item selected for a discount, with eggs and bacon also frequently picked.
Customers will be able to make changes to their choices every three months, and of the items available half will be Waitrose own-brand and the other half other branded items.
The estimated cost of the price cuts could add up to 260m a year or more. Waitrose has said it will split the cost with suppliers who have signed up.
Mark Price, the grocer’s CEO, admitted the scheme could be very, very expensive for us but we think giving power to the customer on 1,000 lines to start with is the right thing to do .
Promotional offers elsewhere will not be reduced, as Price said it was about making sure our customers are really well looked after .
I think what this is going to do is give customers real trust that they are getting a real discount on what they want to buy,” he added. The aim is to retain and reward those who are loyal to Waitrose, while encouraging them to shop more frequently and buy more items while they do so.
Price went so far as to say the move was ground-breaking and suggested it could change both the UK market and the global one too.
The initial response seemed to indicate that customers were excited about the introduction of the scheme. The MyWaitrose section of the website crashed for about thirty minutes as shoppers responded to a promotional email.
Read more on supermarkets:
- What SMEs can learn from our consumer obsession with supermarkets
- Tesco reports worst results in 96-year history with 6.4bn loss
- Sainsbury’s and Sports Direct predicted by consumers to go bust next
The move marked an acknowledgement from established supermarkets that each will have to adapt as discounters like Aldi and Lidl rise in popularity. Tesco has suffered the most, though Waitrose’s sales also dropped 11.5 per cent last year.
Research from Nielsen said manufacturers and suppliers spend an estimated $500bn each year on promotions while 41 per cent turn out to be profitable. It also said the number of failed promotions was on the rise.
Waitrose is hoping this new approach will boost sales, though some have questioned whether the scheme would simply be benefiting already loyal shoppers.
It followed Co-Operative Group’s recent 125m commitment to cut prices on fruit and vegetables in an effort to make greater inroads into the retail sector.