Waitrose to open convenience stores in pursuit of £27bn market

Waitrose plans to launch its first grocery convenience store early next year to take on Marks & Spencer, Sainsbury's and Tesco.

The John Lewis Partnership-owned grocer has hired the consultant Anthony Wysome, a former senior project manager at Waitrose, as head of convenience to spearhead its push into the fast-growing £27.4bn market for small shops.

The revelation that Waitrose is to pit itself against Tesco Express, Sainsbury's Local and M&S Simply Food is particularly unwelcome news for Marks & Spencer, which unveiled like-for-like food sales down 4.5 per cent last week and parted company with food director Steve Esom.

A Waitrose spokeswoman said: "We would hope to be trialling a shop within six to nine months."

The Waitrose convenience stores are likely to be sized between 3,000 sq ft and4,000 sq ft.

Andrew Kasoulis, an analyst at Credit Suisse, said: "The obvious one that Waitrose will trade against would be M&S Simply Food. But convenience stores are difficult to get right, and if Waitrose is successful in this market it will be a while before they hurt anyone."

Waitrose's convenience store plans follow the launch this year of its market-town stores, which are typically sized about 13,000 sq ft.

In May, Waitrose unveiled its first market-town store in St Neots, Cambridgeshire. It opened another in Buckingham, Buckinghamshire, last month, and will unveil another in Brackley, Northamptonshire, next week.

The market-town stores offer a higher proportion of fresh food and locally sourced produce.

The grocery expert IGD said that sales in the UK convenience sector grew by 5.1 per cent to £27.4bn in 2007, which is faster than the overall grocery market.

Separately, the specialist homewares retailer Dunelm, which has 76 stores, vowed to continue its expansion, despite posting a 2.4 per cent fall in like-for-like sales in the 13 weeks to 28 June.

Dunelm's chief executive,Will Adderley, said that it will open "at least" eight stores and recruit about 1,000 employees, including store and support staff, over the next year. He said: "We generate good cash flow and we have a strong balance sheet and shareholder base to fund the expansion."