John Lewis Partnership has posted its Interim Financial Statements for the half year ended 30 July 2016, which shows that Waitrose grew gross sales, market share and customer numbers.
Gross sales increased by 2.2% to £3.25bn, while like-for-like sales decreased by 1.0%. Online grocery sales grew by 4.3%. The firm's share of the market was up to 5.2% and it had, on average, 250,000 more customer transactions a week compared to last year.
Operating profit before exceptional items was down 10.5% to £121.3m, impacted not only by the market conditions but also increases in pay to maintain differentials, investment in IT and higher supply chain costs following the transition to the new National Distribution Centre operation.
Including the exceptional item of £25m for the write-down of property assets that the company now no longer intends to develop and related costs, operating profit was down 28.9% to £96.3m.
Waitrose opened seven new branches in the first half of the year, five core supermarkets and two convenience branches, and closed one convenience branch. In the second half and beyond, the Modern Waitrose strategy continues as the firm plans to increase both the depth and pace of investment in existing stores. As it shifts the focus of investment towards existing branches, the rate of new space growth will slow.
Hospitality sales grew by 7.1% and the group now have 121 cafes, 81 bakery grazing areas, seven wine bars and nine juice bars in our branches. As customers' shopping and eating patterns change, hospitality will play a big part in the branch programme; the next step will be to trial new concepts in shops at Barbican, Chandlers Ford and Twyford during the second half.
Waitrose will continue to innovate with high quality, high provenance products. A highlight of the first half of this year was the launch of the Waitrose premium range. The sales uplift in products in this range has been up 19.4% on last year.
The company now has 6.4 million myWaitrose cardholders, an increase of 7.5% in the last six months, with customers continuing to respond positively to the range of offers and rewards.
Overseas, the group already exports Waitrose products to 58 countries. A new export deal with Alibaba Group has given it the opportunity to export to China for the first time; and a partnership with online retailer, British Corner Shop, means that people in more than 100 countries are now able to buy over 2,000 Waitrose product lines.