By Laura McGuire
Waitrose has pulled out of secret talks to acquire a stake in rival health supermarket Planet Organic.
The high-end supermarket, which is part of the John Lewis Partnership, ceased discussions late last week about a possible agreement, according to reports first published in Sky News,
Sources told the outlet that the deal would have meant Waitrose injecting “millions of pounds” into Planet Organic in exchange for a significant shareholding.
Waitrose pulling out of the deal comes after a challenging time for the John Lewis Partnership, which is facing ongoing financial pressures.
Just last week it was reported that the Partnership’s boss Dame Sharon White was exploring selling a minority fund to outside investors for the first time in the retail giant’s history, spurred by its £234m loss it made during the past year.
The potential move has been described as a“tragedy” by Andy Street, who was the John Lewis managing director until 2016,
“It would be a tragedy if that occurred because I think John Lewis goes a bit beyond a shop,” He told BBC One’s Sunday With Laura Kuenssberg.
He added: “So I would urge the leadership of John Lewis to think about what’s really at the heart of it, what makes it special, and hold on to that.”
Meanwhile, its decision to call off talks with Planet Organic has left the health focused grocer in search of alternative funding.
Last September, it was looking to raise £30m over the next two years to help with the roll out of over 100 stores across the UK.
What next for Waitrose?
“The fact that Waitrose has withdrawn from talks about injecting millions into loss-making retailer Planet Organic is to be welcomed,” professor Joshua Bamfield director at Centre for Retail Research, toldCity A.M.
“It could only have been a diversion to Waitrose, already facing a fall in sales, however worthy the idea of supporting an innovative retailer might have been. In the longer term I am sure that the two business can collaborate, but for Waitrose the important thing is regaining its market share.
The grocery chain, which is headed by George Dymond, currently has 13 stores in London and is set to open a new site in Teddington at the end of February.
The plan was announced in conjunction with the group’s most recent financial accounts ending August 2021 – with Planet Organic posting a turnover of £37.6m down from £40.7m the previous year.
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