Annual Report and Accounts 2016


John Lewis Partnership plc


03


We also benefited from the combination of Waitrose and John Lewis. Click & collect is the most obvious demonstration of that. It accounted for over half of all johnlewis.com deliveries with 70% of them collected in Waitrose.


Finally, we have further enhanced the management of our material sustainability issues with the formation of our Corporate Responsibility Committee (pages 88 and 89) and developed a Partnership Human Rights Strategy and Modern Slavery statement which we are publishing alongside this report.


Partnership Bonus I am very pleased that 91,500 Partners received a Bonus of 10%, which is equivalent to more than five weeks’ pay. Partners worked especially hard this year coping with unpredictable patterns of trade and the need to keep costs tight, making these results hard won and their Bonus well deserved. Taken together with the rising cost of pensions, the total combined cost we have set aside in our income statement for Bonus and pensions was higher than prior years.


Outlook 2016/17 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.


It’s Your Business 2028 Longer term, it’s clear that the growing requirement to invest in technology and increasing price competitiveness means retailers need to keep finding new ways to be productive and efficient, new ways to innovate and new ways to grow profitably. This report explores how the Partnership plans to approach this next phase of our development.


Looking ahead, we know that the changes we’re seeing in society, the workplace and retail between now and 2028 present us with both challenges and opportunities. This report will explore these and the Partnership’s response through our new business plan – It’s Your Business 2028.


No one can predict the future but looking out to 2028 provides a perspective that helps us understand the strains that we feel in our business today and how our existing plans respond to them. It also helps us identify the changes that we need to make and the stretch we need to secure the sustainable growth of our business.


From this we have decided on three Partnership-wide objectives. The first is to strengthen the Partnership’s financial position to protect our business from unexpected economic shocks and to build up our capacity to invest in new growth. Secondly, we must create better jobs for better performing Partners on better pay. This will ensure we deliver on our promise of worthwhile and fulfilling employment for Partners and that we compete on our strengths. Thirdly, we need to strengthen the appeal of our brands and to establish new sources for growth. In Waitrose and John Lewis, we have powerful brands and we recognise the critical importance to customers of constant innovation in such a dynamic market. See page 23 for details.


We are already making progress on all of these objectives. For example, the changes to our pension scheme agreed in 2015 have now come into effect and will reduce the risk profile of our pension scheme over time. We have also introduced the ‘4Ps’ – a focus on Performance, Productivity, Pay and Progression – earlier this year (see pages 24 to 27) which goes right to the heart of how we will be successful in the future.


We have also made a number of important appointments over the last year, all with a view to establishing the leadership team that’s needed to deliver our strategy. Patrick Lewis became Group Finance Director in September 2015. Tom Athron was appointed as Group Development Director in October 2015 with responsibility for developing new growth. On 4 April 2016, Rob Collins was appointed as Managing Director, Waitrose. In addition to these Board appointments and as a key part of our strategy to improve productivity, Andrew Murphy was appointed as Group Productivity Director.


It’s an exciting time for our business. I hope you enjoy discovering more in this year’s report.


Sir Charlie Mayfield Chairman, John Lewis Partnership


Waitrose performance Page 36 >


John Lewis performance Page 39 >


52 v 53 weeks?


The Partnership’s year-end is always the last Saturday in January. Usually we have a 52-week year but last year it was 53 weeks. Unless indicated otherwise, the 2014/15 and 2015/16 year-on-year financial percentage movements for sales and profit have been presented on a 52-week basis so that they are comparable across periods. This has been done to provide a more consistent comparison and meaningful understanding of this year’s financial performance.


It’s Your Business


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