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Business review

Business and strategy

Purpose of the Partnership

The Partnership’s reputation is founded on the uniqueness of our ownership structure and our commercial success. Our purpose is the happiness of all our members, through their worthwhile and satisfying employment in a successful business, with success measured by our ability to sustain and to enhance our position both as an outstanding retailer and a thriving example of employee ownership. We believe our model, where commercial success is a driving force but where the needs of Customers, Partners, and long-term financial ambitions are balanced, represents a sustainable, compassionate and fairer form of capitalism.

Strategic Development – background

The Partnership owns two of the strongest retail brands in the UK - John Lewis was voted the UK’s “Favourite Retailer” and Waitrose the UK’s “Top Food Retailer” in a recent poll of customers by Verdict. Neither John Lewis nor Waitrose depends on dominant market share but on distinctive positioning which secures an exceptional degree of loyalty from customers. That loyalty has been built on customers’ trust and confidence in our sourcing, pricing and quality standards and by selling our products impartially with consistently exceptional service. More recently it has been reinforced by recognition of our long-held desire to act responsibly and to minimise our environmental impact. The Partnership is uniquely placed to do this because our social, ethical and environmental values are ingrained in our culture.

2009 proved to be a challenging year for the UK retail sector, with recessionary pressures impacting consumer confidence. We expect 2010 to remain a tough trading environment, with the prospect of tax rises, low wage inflation and general economic uncertainty exerting pressure on household spending. Despite the external outlook our key priorities have not changed. We remain committed to providing a distinctive offer and experience to our customers and to nurture ‘an enterprising Partnership’ that delivers innovative customer solutions.

Strategic Initiatives

Our strategy is founded in three key building blocks – Partner, Customer and Profit, and we ensure that the Partnership develops in a way which improves each of these in a positive manner. Over the last year, against the backdrop of recession, we developed our strategy further to ensure we remained relevant to our customer base. We continued to pursue profitable growth and also identified opportunities to improve our competitiveness and to enhance the appeal and reach of our customer offer. The Partnership remains committed to growth through seeking new stores and formats in previously unaddressed catchments and by taking our brands to new customers, including in overseas markets. Multi-channel development is key to the future success of the Partnership and we will continue to support our market leading online offer. In addition we are looking at ways to develop strategic partnerships to further enhance our appeal.

To support the Partnership going forward we launched Partnership Services, a new Division which will focus on extracting operational efficiency through centralising activities currently undertaken in multiple locations. This followed on from the successful completion of our Finance Transformation Programme (FTP) which has improved key finance support processes across the Partnership.

Greenbee, our direct services business, builds on our reputation for providing selected services to our customers and for their homes. This is underpinned by our authority in customer service and takes the Partnership into new markets. We provide a range of financial, leisure and home services, which are proving successful with customers as demonstrated by the high renewal rates experienced. We continue to examine ways to better leverage the Partnership’s brands to develop this offer.