Building on consumer s trust with a long-term successful strategy. BUT Success is subjective. It means different things to different people.

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1 Building on consumer s trust with a long-term successful strategy Trust (noun) 1 firm belief in the reliability, truth, ability, or strength of someone or something. acceptance of the truth of a statement without evidence or investigation. 3 the state of being responsible for someone or something. Success (noun) 1 the accomplishment of an aim or purpose. the attainment of fame, wealth, or social status. 3 a person or thing that achieves success. BT Success is subjective. t means different things to different people. Success is always temporary, success is only a delayed failure. nd it is incomplete. Graham Greene : Sort of Life (1971) Success is relative: t is what we can make of the mess we have made of things. T. S. Eliot : The amily eunion (1939) f is a success, then equals x plus y plus z. Work is x; y is play; and z is keeping your mouth shut. lbert Einstein : in bserver 15 January 195 1

2 Waitrose is a supermarket, but.... we re a little different to the other supermarkets. Waitrose is part of the John Lewis Partnership and is governed by a written constitution The Partnership s purpose is the happiness of all its members. Partner s ownership means we share the profits and the responsibilities of trading and the way we do business. The Partnership aims to deal honestly with its customers and secure their loyalty and trust by providing outstanding choice, value and service. The Partnership aims to obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where it operates.

3 What constitutes success for Waitrose? How do we deliver successful business growth for the future without forgetting our values or our past? Waitrose offers a unique customer value proposition & unrivalled levels of service and quality. Waitrose is the top ranked overall retailer in 7 for verall Customer Satisfaction. t ranked #1 for : quality ambience and layout n the Verdict Customer Satisfaction Survey :..it also scores highly on customer service testament to its focused, up-market proposition. ts stores have an upmarket, inspiring appeal and for many, offer refuge from the increasing complexity of the big four s ever expanding store size and product assortment. oreover, the retailer is benefiting from increasing consumer appreciation of healthy eating and this translates into a higher score for quality than any other retailer. Waitrose is the top ranked grocery retailer for verall Satisfaction. t also ranked #1 for : product customer service and shopping experience n the Which? Shopping Survey :..two particular shops stand head and shoulders above the rest. John Lewis and Waitrose, sister companies in the John Lewis Partnership, take gold and silver in our survey (overall). Both were ten points or more ahead of their nearest rivals. Source: Verdict Customer Satisfaction ndex 7 Which Shopping Survey, eb 7 3

4 bn 7bn 6bn 5bn 4bn 3bn bn 1bn bn 1/ The quality and difference of what we do has delivered commercial success without having to compromise our values. 4.5bn /3 Partnership Sales Growth 3/4 4/5 Waitrose John Lewis 5/6 6/7 6.bn 7/ Sales growth since 1/: Total Partnership 5% Waitrose 7% John Lewis 3% We also engage with our customers in a unique way through our media ur research shows our publications are valued, trusted and read. 4

5 5 or many years we have been linking high quality, full value wines, with the food on our recipe cards promoting the wine with food occasion. n pril 7 we launched Thirst magazine

6 ur in store environment is second to none s is our customer service We have 197, WSET qualified, wine specialists in our 17 branches. 6

7 ur wine specialists also enable Waitrose to offer; -market leading customer service -knowledge and a passion for BWS -unrivalled attention to detail -an opportunity for full value sales growth. n the responsible drinking debate, our philosophy is clear and determined by our constitution. The Partnership has an obligation to contribute to the wellbeing of the communities where it operates. We provide shelf edge guidance on units and alcohol consumption (above). 7

8 n the responsible drinking debate, our philosophy is clear and determined by our constitution. Through our partnership with we have the lcohol and You booklet available through our branches, to our customers and Partners. n the responsible drinking debate, our philosophy is clear and determined by our constitution. lso in partnership with we have considerable information on lcohol and You available through the Waitrose website. We have stringent age checks in branch and undertake our own test purchasing. We do not engage in half price wine promotions. We do not run below cost promotional activity on any BWS products.

9 Part of our buying policy is to explore new innovations in product and format. Vin a Deux offers customers high quality wines in 5cl format. Just the two of us Waitrose sizes up the wine market with smaller bottles Waitrose sells Vin a Deux - a range of eight quality wines at 5cl, a comfortable size for two people to share. This new concept will cater for responsible drinking habits of the future. Wine Buyer, Nick oom says: Drinking a deux will dispense with unfinished bottles of wine or feeling the need to finish off a full bottle. This innovative size will put a stop to wine buffs drinking wine past its best - either cluttering up a kitchen work-top or lurking in the fridge door. The all-rench range includes old world classics from regions such as Burgundy, Beaujolais and the Loire. The wines have been carefully selected from Waitrose suppliers featuring brands such as J oreau and Louis Bernard. These are already well-established with restaurant-goers and this is the first time customers will be able to drink them at home. nnovation builds on and delivers further success. BT Success is subjective. t means different things to different people. ll you need in this life is ignorance and confidence; then success is sure. ark Twain : letter to rs oote, December 17 9

10 Sales performance across the multiple retailers during Christmas 7, shows a correlation between strong overall sales growth and below cost promotional activity on alcohol. Something that Waitrose does not engage in. 4.9% 5.7% 6.% 9.% Tesco sda Sainsburys orrisons Co-op Somerfield Waitrose 9.3% 9.% 16.4% 16.5% 14.9% 15.1% 1.% 1.5% Year on Year value growth Christmas 7 Total Grocers Growth = +5.1%.6% 5.% 5.7%.5% 5.4% ultiple Grocers market share Christmas 7 3.7% 3.5% 3.7% 3.7% Tesco SD Sainsbury's orrisons Co-op Somerfield Waitrose 1w/e 3 December 6 1w/e 9 December 7 Source: Nielsen Homescan 1 weeks to 9 th December 7 Building on consumer s trust with a long-term successful strategy n summary Waitrose strives to achieve the above in several ways; By listening to our customers and providing a real difference in the way we retail alcohol. nvestment in our BWS specialists ndustry leading and consumer focussed publications to educate and inform Enabling us to focus and trade up to sales at full retail value ur buying is focussed on delivering outstanding quality wines and exploring new formats We are fundamentally opposed to below cost promotional activity on alcohol and half price wine promotions. 1

11 Building on consumer s trust with a long-term successful strategy n summary Waitrose strives to achieve the above in several ways; Through our unique ownership structure we are free of shareholder pressure and can approach the way we do business in a different way, employing genuine stakeholders. ur values are at the core of our business - including the way we retail alcohol. The Partnership aims to deal honestly with its customers and secure their loyalty and trust by providing outstanding choice, value and service. 11