Premium market segments: Waitrose at Canary Wharf

Further evidence that the economic downturn hasn’t affected everyone equally: there are still groups of high income consumers out there. Effective marketing requires firms to target groups of consumers with similar buying habits – or market segments. Waitrose are gambling on their target market with a £15m refurbishment of their Canary Wharf store, featuring delights such as wines at up to £425 a bottle.

London’s Canary Wharf isn’t exactly a normal location. It’s where banks including Morgan Stanley, Barclays, Citigoup and HSBC have headquarters. The business district has grown substantially since Waitrose opened its first store there in 2002, according to The Guardian.

Its new-look branch, under the glass towers of Canada Square, now attracts 80,000 regular weekly customers. It is the biggest and busiest Waitrose in the UK, taking three times as much money as the average, and with more than double the footfall.

What about those premium wines? The article quotes the head of beer, wines and spirits buying at Waitrose who says “I don’t expect huge numbers of people to buy (the £425 bottle), but some definitely will. And there are many more wines at much more affordable prices and which represent very good value for money”. And what about the effect of the recession? “We have found that in the recession staying in has become the new going out, and consumers have wanted to have a little luxury by drinking good wines at home. Sales of fine wines have been holding up very well.”

Takeaway food for desk-bound lunches will remain a core, high volume business. With the average worker taking a 17-minute lunch-break, Waitrose serves 4,000 customers between 12–2pm. And there are even more to come. The population of Canary Wharf is expected to increase to 120,000 over the next few years as new companies move in to occupy vacant offices. In December Shell will move into Jubilee Place, bringing an additional 1,700 workers. And next year JP Morgan will take over the building occupied by the collapsed Lehman Brothers, boosting the working population by 8,000.

Waitrose’s director of store development, said the demographics were “fascinating”, and the rest of the store reflects their needs: “A large proportion of shoppers are renting flats, so they are looking for colourful accessories like cushions, bedding and towels. We know that, despite the recession, there are a lot of very wealthy people with money to spend. They are also very busy as they are working hard. So they want an edited choice which is what we have tried to give them.”

The store has a slightly higher proportion of male shoppers, at 51%, than the average – but the top floor has been designed as a luxurious fashion temple for women. Among the 110 top brands, for example, are handbags from names such as Longchamp, Osprey, DKNY and Modalu, including its famous “Pippa bag” carried by Pippa Middleton.

At 6pm on a weekday evening, Canada Square is buzzing and the bars and restaurants outside are packed. But not everyone is sure that the boom times are back, yet.