John Lewis Partnership plc annual report and accounts 2013

Business review Review of performance (continued)

Waitrose

Waitrose’s gross sales grew strongly, up 6.7% (£363.5m) to £5.76bn in a slow market. Like-for-like sales grew by 3.4% with a noticeable acceleration in the second half of the year as the impact of our investment in lower prices kicked in. This also helped to drive volume growth in our like-for-like estate. Gross sales density rose by 1.0% to £1,111 per square foot and gross sales productivity per FTE increased to £198,200, up £4,000 (2.1%) on last year.

Operating profit grew by 12.2% to £292.3m. Operating margin was up from 5.1% to 5.4%, operating profit per selling square foot was up 5.6% from £53 to £56, as was operating profit per FTE, which increased by 7.4%, from £9,400 to £10,100.

Our commitment to price match brands with Tesco was extended to all lines, excluding promotions

A sustained investment in lower prices, unwavering commitment to product quality and high standards of customer service have resulted in Waitrose outperforming the industry for the fourth year running with market share up from 4.7% to 4.9%.

The combination of Brand Price Match (matching Tesco’s prices on branded lines, excluding promotions), at least 1,000 promotions a week, the expansion of essential Waitrose to 1,800 lines, and sharper own-label prices across the board created an attractive value package, and continued to change consumers’ views on Waitrose’s price position. Overall, customer transactions grew by 6.1% in the year.

In parallel with lower prices, innovation continued apace and we introduced 4,700 new and improved products, more than ever before in a single year - all with the same commitment to the high standards of quality, sourcing integrity and fairness to suppliers for which Waitrose is known. Particularly successful new lines have been ranges of celebration cakes and desserts and the Heston from Waitrose range of ready meals. Quality and innovation will continue apace with 5,000 new products planned for 2013/14.

Our strategy has anticipated changing shopping patterns and customers now choose to shop across all our formats - full weekly shops in branches and online (including mobile), top-up shopping in Little Waitrose shops, Click & collect purchases

Waitrose Gross sales (£m)

 2009 2010 2011 2012 2013  

 4,156 4,532 4,974 5,400  5.764

Waitrose Gross sales per selling square foot (£)

2009 2010 2011 2012 2013  

1,051 1,066 1,093  1,100 1,111

Waitrose Gross sales per FTE (£000)

2009 2010 2011 2012 2013  

182 192 196 194 198 

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