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Multichannel powers 60% profits boost at John Lewis Partnership

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John Lewis today said its multichannel focus had helped to boost its sales and profits in the first half of its financial year.

The John Lewis Partnership, which includes both Waitrose and the John Lewis chain of department stores, today reported an 8.7% lift in gross sales to £4.4bn and a boost to pre-tax profits of almost 60% to £145.5m. The department store chain John Lewis saw sales grow by nearly 12.8% to £1.6bn with operating profits up by 188.6% to £45.6bn. Its sister company Waitrose , the supermarket, saw sales rise by 6.6% to £2.8bn and operating profits by 28.9% at £142m.

Chairman Charlie Mayfield said factors including one-off events such as the Diamond Jubilee and the lead-up to the London 2012 games had helped the company achieve “excellent results”. But a more long-term factor at work was the growth in sales and profits as a result of developing its multichannel operations.

“Multichannel sales made a vital contribution across both John Lewis and Waitrose and we extended the reach and appeal of our offer with the extension of Click & collect to most Waitrose shops,” said Mayfield.

Other factors behind the boost to both sales and profits included more differentiated products, a Waitrose brand price match, and design collaborations in John Lewis, said Mayfield. The effect of investments in internet delivery service was also felt in these results, the company said, with online sales growing by 50%, making it the UK’s fastest-growing major online grocery retailer, according to Kantar Worldpanel figures.

Meanwhile sales grew by more than 40% and now account for 24% of total John Lewis sales.

“Our multi-channel operation continues to go from strength-to-strength, with customers appreciating the ease of shopping across a variety of channels from smartphones to in-store internet kiosks,” said Mayfield.

Looking ahead the company expects consumer demand to remain fragile but stable. The first six weeks of the second half have seen partnership sales rise by 10.3%, while Waitrose gross sales have risen by 8.7% and John Lewis’ by 13.1%.

Mayfield said: “Our rate of growth will remain positive but will be slower in the second half and, with further investment planned in that period to strengthen our business for the longer term, the rapid rate of profit increase is not expected to be carried through to the full year.”

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