Monday, Dec 31, 2007

Waitrose stores will appear abroad for the first time in April after Britain's sixth-biggest grocer signed a licensing agreement to open more than 20 sites in the United Arab Emirates by 2010.

The retailer, part of the John Lewis Partnership, has signed a deal with SpinneysSpinneys, a Dubai-based store operator that already sells a range of Waitrose products, to set up Waitrose-branded shops as it looks for avenues of growth overseas.

Waitrose exports products to 20 countries but this is the first time the company has licensed its name to be used on a store front outside the UK.

Richard Hodgson, commercial director, said Dubai was a perfect place to start for Waitrose because of high levels of affluent expatriate shoppers and Arabs keen to try premium western brands.

Mr Hodgson, who joined Waitrose from Asda last year, said the deal began a more ambitious programme in which Waitrose might enter several overseas markets. "Over the next 10 years, our international business could account for as much as 10 per cent of turnover," he said. "We have said that we wanted to double turnover to Pounds 8bn over that time, so international could be an Pounds 800m business against Pounds 20m in export deals now."

Waitrose is copying many UK-based retailers, such as Marks and Spencer, Mothercare, Monsoon, Debenhams and Alliance Boots, that have built store networks overseas through franchises.

Delta Two, the Qatar-backed investment group that this year tried to buy J Sainsbury, has drawn up plans to export the Sainsbury brand to the Middle East. Tesco, Britain's biggest grocer which operates in 13 countries, has opted to own all its stores.

Mr Hodgson said David Morton, a former Sainsbury executive who joined Waitrose four years ago, would become the international director in the new year.

He would be charged with expanding Waitrose's export business - it already sells "ambient" products in 20 countries - and finding new franchise partners. Waitrose said it had received interest from South Africa and India. It also hoped soon to sign an export deal with a well-known US retailer.

Exports to the UAE alone were Pounds 90m in 2005, according to Food from Britain, an export consultant, with the Middle East region accounting for sales nearer Pounds 350m.

Waitrose's first shop, comprising 25,000 sq ft, will open in April in a suburb of Dubai. Another two stores will be built next year, with another 18 SpinneysSpinneys stores moving to the Waitrose brand over the next two years.

By ELIZABETH RIGBY