Annual Report and Accounts 2016


John Lewis Partnership plc


37


Performance against Divisional KPIs Gross sales growth %


6.0 4.6 1.1 5.1


Overview


Like-for-like sales % 1.4


-1.3 2014 2015 5.4


Operating margin % 3.9


2016 2014 2015 2016 3.8 197.2


Gross sales per average FTE £000 188.5*


As a result of effective management of costs and a focus on efficiency throughout the business, operating profit was £232.6m. This was down 0.8% (down 2.0% on a 53-week basis), but excluding property profits it was up 3.9% (up 2.5% on a 53-week basis), despite absorbing a greater share of centrally incurred functional costs. This profit improvement came against a backdrop of exceptionally tough market conditions and continuing food price deflation, as a result of improved productivity in our branches, reduced head office costs and operational improvements in our supply chain.


192.4 2014 2015 5.5


Selling space m sq ft 5.9


2016 * 2014 52-week basis. 6.1 1,126


Gross sales per selling space m sq ft 1,124*


2015 2016


Gross sales were up by 1.1% to £6.5bn (down 0.7% on a 53-week basis), with like-for-like sales down 1.3%. We continued to increase our market share, up by 0.1% to 5.5%, and have outperformed the market on sales for 80 consecutive months. We have also grown customer numbers and had, on average, 220,000 more customer transactions a week compared to last year.


1,086 Market


The UK grocery market is changing rapidly and our response to advances in technology and the significant changes in how customers wish to shop is to create Modern Waitrose; we made good progress with this strategy over the last 12 months.


2014 2015 Cash from operations down 20.9% 2015: £559.8m £443.0m Pick Your Own Offers


Our ground-breaking Pick Your Own Offers scheme launched in June 2015.


2016 * 2014 52-week basis. Capital expenditure down 42.2% 2015: £388.5m £224.5m Waitrose at King’s Cross


Top picks since launch:


1. essential Waitrose bathroom tissue, white


2. Waitrose Blacktail free range eggs, large (x6)


3. Waitrose cherry vine tomatoes


4. essential Waitrose British chicken breast fillets


5. Waitrose Scottish Salmon fillets


In September, we opened our King’s Cross branch and third cookery school in a restored Grade II-listed Midland Goods Shed. Among other features, the branch includes a working beer pump supplied by Camden Brewery, a wine bar and a selection of cooking classes run from the Cookery School.


Fair price for milk


For many farmers, falling prices paid for their products are leading to an uncertain future for their businesses. In a tough trading environment, we have continued to source our milk from a closed producer group of 73 farmers and pay one of the highest prices per pint in the market. This price has been set taking into account the cost of production and investing in the future of their farms.


2015 2016


It’s Your Performance


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