Could the return of free coffee win Waitrose the battle of the posh supermarkets?

One of the most contentious loyalty schemes on the high street returns next week – but James Moore is not convinced a complimentary latte is enough to give the high-end supermarket the caffeine kick it needs to beat its main rival, Marks and Spencer

When Waitrose first introduced its “free coffee” loyalty scheme in 2013, it was met with mixed success. Some shoppers relished a complimentary daily cup, while others blamed the scheme for attracting the “wrong type” of clientele to the upmarket supermarket chain.

So contentious was the initiative that it even stoked a (minor) political row. Former shadow communities minister Andy Sawford moaned that the offer could “further destroy the British high street” by stealing business from small independent coffee shops – to which ex-prime minister David Cameron responded by saying he didn’t know what “people were complaining about”. Cameron didn’t get much right but that was an instance where he had his finger on the pulse.

Since then, the Waitrose scheme’s terms and conditions have chopped and changed with the weather. But its cancellation during the pandemic created a very British storm of controversy. Its partial return was widely celebrated.

Now, from Monday 27 January, Waitrose shoppers once more can claim their free latte without having to buy so much as an organic kumquat first. Just remember to bring your own reusable cup.

So, why the sudden shift? Because there’s magic in those coffee beans.

CEO James Bailey is hoping that reinstating the coffee perk to anyone who enters a branch of Waitrose, whether they buy anything or not, will bolster the brand’s relationship with its customer base, as the high-end supermarket tries to claw back lost ground in its perennial battle with Britain’s other middle-class grocer, Marks & Spencer.

At the end of last year, Kantar reported that M&S had overtaken Waitrose in market share for the first time outside the Christmas period. A slight dip in Waitrose’s share of the grocery market – by 0.11 per cent, to 3.91 per cent – came as M&S beat every other supermarket in sales growth.

Seemingly feeling the pressure, Bailey has also announced a slew of new concepts to help Waitrose get its mojo back. These include revamping its ever-popular Duchy Organic range, introducing more products to the own-brand No 1 Waitrose & Partners range, and offering free recipe cards from celebrity chef Yotam Ottolenghi. It has also retained its fresh food counters at a time when many of its rivals have ditched them to cut costs.

But the supermarket’s work cannot stop there – especially when M&S now owns half of Ocado, which, in the latest supermarket price comparison report from Which?, scored higher in terms of value than Waitrose. To add insult to injury, Ocado partnered with Waitrose before the merger.

That’s not to say that Ocado hasn’t been free of stumbles, but it reported a record-breaking Christmas and has been growing sales and market share at a fair clip thanks in no small part to the presence of M&S food on its website.

Life’s tough at the top end of the supermarket sector – even more so given that chairman Jason Tarry, who joined from Tesco last September, will want to signal to consumers and the markets that Waitrose is still a contender, after a dismal few years in which the hallowed annual bonus hasn’t been paid to staff (known as “partners”). But I suspect that it will take more than a few free coffees for Waitrose to wrest back its crown as the favourite shop of the middle classes from M&S.

Still, showing your customers a little love is never a bad thing – and if that means letting them fill up their coffee cups for free before they inevitably fill up their trolleys, so be it.