Parent company of Waitrose, John Lewis has reported that its profits fell by 11 per cent for the year ending January 30, 2016, as the result of lower property profits, a difficult trading environment and higher pension charges.
The company made a profit before partnership bonus, tax and one-off items of £306 million (around €392 million), which was within a guidance of between £270 million and £320 million, but 10.9 per cent less that the previous year’s profits.
Chairman of John Lewis Partnership, Sir Charlie Mayfield said in a statement, "Market conditions were challenging through the year with deflation in grocery of 2.6 per cent and subdued demand in non-food."
Waitrose saw operating profit of £232.6 million, which was down 2 per cent on the year before, but when excluding property profits, was up 2.5 per cent. Gross sales were down by 0.7 per cent to £6.46 billion, with like for like sales down by 1.3 per cent.
However, the grocery retailer grew its customer numbers, and had an average of 220,000 more customer transactions a week compared with the previous year.
Waitrose’s click & collect service grew in popularity, with collections of John Lewis orders from Waitrose up by 19 per cent, and 70 per cent of all click & collect orders being picked up from the supermarket’s branches.
The launch of the Pick Your Own Offers initiative in June has also attracted more that a million customers to Waitrose’s loyalty scheme.
Commenting on John Lewis’ outlook for 2016/17, Sir Mayfield said, “Conditions in the market will remain difficult, especially in grocery.
"However, given our continued investment in both our operations and the customer offer, I expect sales in both Waitrose and John Lewis to continue to perform comparatively well against the market."
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.
