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John Lewis and Waitrose multichannel strategies outlined

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The John Lewis Partnership today explained how multichannel strategies at John Lewis and Waitrose are developing.

The update came as the employee-owned partnership released half-year results showing gross sales across the two retailers reached £5.1bn, 2.1% ahead of the same time last year. Pre-tax profits across the partnership reached £224.0m after exceptional items, some 72.6% ahead of the same time last year thanks to £128m in income from the sale of buildings. But before that one-off credit, pre-tax profits reached £96m, 26% down on last year, mostly as a result of the cost of higher pension charges.

Partnership chairman Sir Charlie Mayfield said it had been a “solid first half for the Partnership in a difficult market. Both Waitrose and John Lewis are growing sales and increasing market share.”

Sales at department store group John Lewis, an Elite retailer in the IRUK500 research, reached £1.9bn, 3% ahead of the same time last year, on a like-for-like basis, which strips out the effect of store openings and closures. At John Lewis operating profits were £47.1m, 16.3% down on last time, reflecting the costs of restructuring and holiday pay as well as “the costs associated with the ongoing shift in both channel and fulfilment mix, a consequence of operating in an omnichannel world.”

Online, sales reached 17.1%, some £647m ahead of the same time last year. However, sales from the store fell by 1.8%, a fact that the company put down to the comparison with its 150th anniversary celebrations last year. “Our main focus,” said the partnership statement, “continues to be on investing in both our shops and online to maintain and develop our omnichannel proposition.”

Sales at the Waitrose supermarket reached £3.1bn, down by 1.3% on a like-for-like basis, while operating profits hit £135.5m, 6.7% down on last year. Online, Waitrose, a Leading company in the IRUK500, saw a 13% fall in grocery sales, which it said suffered in comparison to a period last year when high levels of discounts were offered. The supermarket opened a national distribution centre as well as a purpose-built dotcom distribution centre in Coulsdon, to replace its now-closed Acton centre. It also saw the number of active myWaitrose card holders rise by 18%, following the launch of the ‘pick your own offers’ scheme that now has 700,000 active members who choose on which 10 products they’d like to get a 20% discount both online and off.

Services that bridge the online and offline continued to be popular, with click and collect orders up by nearly 50%. Click and collect foreign exchange is now available in 94 stores. The company is running a Modern Waitrose strategy that includes “creating additional reasons for customers to visit branches in the online era, including bakery grazing areas in 35 stores, to date, and cafes in 114 stores, including 82 with outdoor seating.

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