The John Lewis Partnership has delivered "a healthy trading performance and increased market shares in challenging conditions", for the 2015-16 period, according to the company's annual report, issued today.
Profit before Partnership Bonus, tax and exceptional items was down by 9.3% YOY (10.9% on a 53-week basis) – but, according to chairman Sir Charlie Mayfield, it would have been up around 9% if not for higher pension charges and lower property profits.
John Lewis achieved sales growth and market share gains in Fashion, Home and Electricals and Home Technology and an increase in profits, with online sales growth particularly strong at 17%. "Although sales in shops were down 1%, 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 shopped in one of our stores," says Charlie.
A strong synergy between John Lewis and Waitrose is also at work – Click & Collect accounted for over half of all johnlewis.com deliveries, with 70% of them collected in Waitrose.
John Lewis' operating profits were up 0.7% at £249m. Sales in Home were up by 4.1% – the retailer says it plans to build its personalisation offer to allow customers to create increasingly bespoke interiors.
The company has further enhanced the management of its material sustainability issues with the formation of a Corporate Responsibility Committee, and has developed a Partnership Human Rights Strategy and Modern Slavery statement.
The future will see the partnership focus on three key objectives, says Charlie. "The first is to strengthen the partnership’s financial position to protect our business from unexpected economic shocks and to build up our capacity to invest in new growth. Secondly, we must create better jobs for better performing partners on better pay. This will ensure we deliver on our promise of worthwhile and fulfilling employment for partners and that we compete on our strengths.
"Thirdly, we need to strengthen the appeal of our brands and to establish new sources for growth. In Waitrose and John Lewis, we have powerful brands and we recognise the critical importance to customers of constant innovation in such a dynamic market.
"Longer term, it’s clear that the growing requirement to invest in technology and increasing price competitiveness means retailers need to keep finding new ways to be productive and efficient, new ways to innovate and new ways to grow profitably.
