British retailer John Lewis Partnership said it would accelerate investment this year as it reported a trebling in annual profit, driven by an improvement in its food business, and forecast more growth as its turnaround plan gains momentum.
The UK's largest employee-owned business, which runs John Lewis department stores and the upmarket Waitrose supermarket chain, said on Thursday it would invest up to £600 million (€714 million) in the business in 2025/26, up from £450 million (€535.5 million) in its year to January 25.
The partnership is also spending £114 million (€135.7 million) on a 7.4% pay rise for 65,000 workers, or partners as it calls them. However, for a third straight year, it is not paying them an annual bonus.
'Significant Opportunity For Growth'
New chairman Jason Tarry said he saw "significant opportunity for growth" in both brands, though this required "considerable catch-up investment" in stores and the supply chain.
"I am confident with the transformation momentum in the partnership, we remain well placed to drive further growth in the year ahead and over the longer term," he said.
The department store division in particular has had a difficult few years as it battled the COVID pandemic and then the cost-of-living crisis. It closed stores and cut jobs.
But the partnership is now benefiting from the plan launched by previous chair Sharon White in 2020 that sought to boost the appeal of its brands and invest in technology, whilst also cutting costs.
White was succeeded in September by former Tesco executive Tarry, who is tasked with driving the next phase of the partnership's modernisation at a time when it is facing increased competition from key rival Marks & Spencer.
The partnership made a profit before tax and exceptional items of £126 million (€149.9 million) in 2024/25, up from £42 million (€50 million) in 2023/24. Sales grew 3% to £12.8 billion (€15.2 billion), with Waitrose sales up 4.4% and department store sales flat.
It expects the macroeconomic environment "to continue to be challenging," but forecast a further increase in profit in 2025/26.
Waitrose & Partners
Waitrose & Partners reported sales growth of 4.4%, to £8.0 billion (€9.52 billion), with volume growth of 2.6% as the grocer continued to see positive momentum.
The company attributed this growth to investment in Waitrose's quality food proposition and lower prices as well as further improvements in technology and availability.
Adjusted operating profit of the division amounted to £227 million (€270.1 million), up £122 million (€145.2 million), while operating margin doubled year-on-year to 3.0%.
Sales of Waitrose's own-brand products increased by 5.9%, while on-demand grocery sales increased by 110% during the year.
News by Reuters, additional reporting by ESM.
