Tuesday, March 26, 2019

JLP announces continued profit growth in spite of on-going investments


The John Lewis Partnership, which owns Waitrose and several other services as well as its namesake department stores, has reported growth in both revenues and profits for the first half of the financial year.

Chairman of the partnership, Sir Charlie Mayfield, puts this down to the company‘s emphasis on improving its omni-channel retail experience. Online sales at John Lewis were up more than 25 per cent to £552 million, which now represents more than 30 per cent of merchandise sales.

Mayfield said: “Our sales growth was driven by more customers shopping with Waitrose and John Lewis… This reflects the growing appeal of our omni-channel offer across both brands, including the success of Click & Collect, which now accounts for more than half of John Lewis orders placed online and the popularity of the ‘my Waitrose‘ and ‘my John Lewis‘ programmes, which are encouraging customers to shop more frequently with us across all of our channels”.

The increase in profit comes despite ongoing investment (15 new branches opened, 11 more than in the same period last year), cost savings and efficiency in more profitable categories have swung more firmly into growth. Such performance underlines that the John Lewis approach – investing carefully but quickly, making things work for customers and optimising for efficiency – is delivering results.

Despite the fact the business is now bigger and more mature than it was five or so years ago, it is encouraging to see that John Lewis has lost none of its entrepreneurial zeal. Initiatives such as extending the reach of the brand through the opening at Heathrow and the soon to be opened St Pancras plus the addition of services such as optical and the roll out of new restaurant concepts, demonstrate that the firm is still thinking of new ways to serve and satisfy its customers.

Looking ahead for the rest of the financial year, he said: “The outlook in the grocery sector remains challenging and we expect that to continue to be the case for some time”.

Despite this the Partnership said Waitrose sales outperformed the industry for the 62nd consecutive month and market share increased to 5 per cent. Mayfield remained optimistic, anticipating that “sales at both Waitrose and John Lewis will continue to outperform their respective markets in the second half, reflecting the strength of both brands.”

The news comes as Mayfield announced this morning that its retail outlets in Scotland would most probably be forced to raise prices if Scotland achieves independence in a week‘s time. Higher distribution costs and taxes and the loss of “major efficiencies” that come from operating in a larger market would force the partnership to increase the cost of its products.


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