Waitrose is in talks with Amazon.com Inc (NASDAQ:AMZN) over a potential partnership to sell groceries on the online retail giant's platform in a move that sees the supermarket chain try and regain some of the market share it has lost during the cost-of-living crisis.
Considering the move years after cutting ties with Ocado to sell its own groceries online, Waitrose has been discussing a third-party deal with Amazon, understood to be a similar agreement to that of Iceland.
Under the frozen food retailer’s deal, Amazon offers Iceland products on its marketplace, providing Prime customers with same-day grocery deliveries.
Waitrose's market share has slipped from 5.1% to 4.6% since 2020, losing out to discount retailers Aldi and Lidl, both of which have rapidly gained a larger holding of the industry as customers look to save as much money as possible.
“As long as it is not cannibalistic of Waitrose’s own online sales, it could add mid-to-high digit sales to specific stores,” Clive Black at Shore Capital said.
Talks are ongoing and both parties declined to comment on the matter.
Waitrose's move to explore new avenues aligns with its strategy to attract more shoppers and because its owner John Lewis Partnership is currently undergoing a transformation plan, the supermarket chain is also considering relocating certain stores to more strategic locations.
At the end of last month, John Lewis was reportedly in the process of raising up to £150 million through the sale and leaseback of 12 Waitrose supermarkets.
Current John Lewis chair Sharon White revealed she would be stepping down from the company earlier this month and with a large focus on bringing the firm back to profitability, the successor is expected to have a lot on their plate.