The John Lewis Partnership has reported its profit before tax has hit £56mn, marking a substantial £290mn improvement year-on-year, with Waitrose’s performance helping drive growth.
Overall partnership sales remained stable rising 1% to £12.4bn, but Waitrose witnessed a 5% increase to £7.7bn – driven by record customer numbers. John Lewis sales experienced a slight decline, down 4% to £4.8bn.
Additionally, the Partnership has also expanded its customer base, with one million new customers bringing the total to 22.6 million.
The department store added its entering a year of significant investment – £542mn planned (over 70% up on the year) – much of which will focus on modernising its technology, refreshing stores and simplifying how it operates.
Sharon White, chairman of the John Lewis Partnership, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and our Partners’ commitment to delivering excellent customer service.
“This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our Partners.”
John Lewis confirmed that it would invest £116mn for partners pay. This will lead to a 10% increase with minimum wage rising to £12.89 in London and £11.55 per hour nationwide. Staff will not receive a bonus however, for the third time in four years.
Robyn Duffy, senior analyst for consumer markets at RSM UK, reacted: “As an employee-owned business that has failed to pay bonuses for several years, and with competitors seeing strong growth, the pressure is now on for new leadership to bring positive change. New CEO Nish Kankiwala has announced a ‘back-to-basics’ approach and plans to put retail back at the heart of John Lewis. Noise around the proposed housing and financial services plays have quieted for now, both interesting ideas but in a challenging retail environment a return to core values is needed.
“Only a few years ago John Lewis was the go-to retailer for the middle classes as it delivered quality at the best possible price. Returning to core values alongside investment in technology mirrors the fundamentals from other high street success stories and should help the business further improve margin. With 2023’s positive results behind them, John Lewis has the chance to return to the playing field and with the British public loving an underdog, they’ve everything to play for.”
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