Warwick District Council leader Cllr Michael Coker carried out the official ground breaking.
He said: "We have been trying for some years to regenerate and reinvigorate Kenilworth and an essential part of that has been the redevelopment of Talisman Square and the arrival of Waitrose.
"This event sees the start of that process and I am sure everyone in the town will welcome it and looks forward to its early completion."
Hugo Hawkings, chief executive of Discovery Properties and development partner of Talisman Square owners Cobalt Estates, said the event marked a significant milestone in the project and that it was rewarding to see the efforts of recent years come to fruition.
He said: "This is the first and a big step in a programme that will eventually see a major transformation of Talisman Square."
Tim Perry, development construction manager for Waitrose, added: "The new Waitrose food shop in Kenilworth will allow us to offer a wide choice of quality food to people in the area, in a fresh, modern and attractive shopping environment."
