John Lewis illustrated the changing way that shoppers are buying as full-year results showed growing online sales and falling store sales. But while online sales grew by 17% in its latest financial year, with m-commerce up by 34%, and store sales fell by 1%, parent company the John Lewis Partnership said the story was very much a multichannel one.
“Our results were very much a result of the effective combination of shops and online, demonstrated by the fact that more than three-quarters of our customers made a purchase from one of our shops,” said John Lewis chairman Sir Charlie Mayfield.
In addition, the company said, John Lewis, an Elite retailer in IRUK Top500 research, found that its online sales go up in areas where it opens a new shop.
At the same time, online sales at sister supermarket Waitrose, a Leading IRUK Top500 retailer, were down by 2.9% on last year, in comparison to what the partnership described as an “strong promotion-driven performance last year.” But in the second half of the year, ecommerce sales were up by 8.3%.
The figures came as the John Lewis Partnership [IRDX RJLP] today reported sales of £11bn in the year to January 30 2016, 0.7% up on the previous year.
Group pre-tax profits of £305.5m, before one-off charges, were 10.9% down on the same time last year, with operating profits at John Lewis up by 0.1% at £250.2m, and at Waitrose down by 2% at £232.6m.
John Lewis said that 33% of its total merchandise sales took place online, and 67% in store. Click and collect orders were up by 11% and accounted for 53% of online orders – with the number of orders picked up from Waitrose branches growing by 19% – while sales through mobile devices were up by 34%, with those through smartphones up by 86%. The myJohn Lewis scheme grew members by 32% to 1.8m.
“In line with changing customer expectations,” said the retailer’s statement, “we are redesigning shops to offer additional services and instore experiences, while delivering convenience and added flexibility through our online channels.”
Meanwhile, at Waitrose the emphasis was on creating a Modern Waitrose that gives customers “additional reasons to visit our shops in an online age” – including 117 cafes, six wine bars, nine juice bars, and three sushi bars.
Both John Lewis and Waitrose have invested in improving online logistics, with John Lewis set to open a new Magna Park distribution centre that will combine online orders onto one site, and Waitrose opening a purpose built .com fulfilment centre in Coulsdon in March 2915.