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John Lewis Partnership plc Interim Report 2009


In April, Waitrose became the first UK supermarket to abolish delivery charges for online shopping with WaitroseDeliver, currently available in 113 Waitrose branches. This move has contributed to a 84% increase in orders, with sales up 77%.

We increased our space by 4% with the opening of 15 new and acquired shops and the opening of the first 2 Waitrose shops in Welcome Break service stations, creating 1,500 new jobs. The trial of our new convenience and market town formats have been encouraging, as has our second shop in Dubai.

Customers responded well to Waitrose’s support for the ‘End of the Line’ campaign which underlined our commitment to selling only sustainable species of fish. We also launched a new range of homeware products on Waitrose.com in collaboration with John Lewis and this development has made a promising start.

We invested £14.0m in price and promotions including the essential Waitrose range and customers responded positively with promotional participation up from 18% to 22%, an increase of 4% on the prior half year. Efficiency and productivity improved, as all costs including wastage were well controlled.

Taken together, these developments ensure Waitrose is relevant and increasingly accessible to more and more customers, giving them the confidence that they can come to Waitrose for the most comprehensive everyday to gourmet food range in the UK.

Thanks to the efforts and support of our Partners we are making good progress with significant structural initiatives including our End to End Supply Chain and Head Office reviews. These actions will help Waitrose to continue to deliver growth.

John Lewis

Trade held up well considering the challenging economic environment and improved as the half progressed. Gross sales were down £35.8m, 2.9%, to £1.21bn. Like-for-like sales were down 4.7%. Operating profit, excluding property profit, was down £20.1m, or 49.0% to £20.9m, still significantly better than expected. The first half of the year represents a small part of our annual profit and was impacted by lower sales of 6.7% in established shops, resulting in lower gross profit despite good cost control. This, together with higher costs for the new Liverpool and Leicester department stores, Magna Park pre-opening expenses, higher energy costs, and £3.4m of investment in change and growth initiatives contributed to a lower operating profit.

Operating profit, before exceptional items, property profits, opening and other one-off costs, was £33.9m, down £14.0m or 29.3%.

Our online offer is prospering with strong sales in John Lewis Direct, up 11.6% to £151.5m, helped by an increase in the number of lines available and the positive performance of our new services including ‘Click and Collect’ and Express delivery.