This weaker performance has been driven by significantly reduced profitability in John Lewis, especially in Home and Electricals. Despite Waitrose performing well, it is the third year of declining profit across the whole partnership.
Waitrose operating profits before exceptions grew by £10m to £213m. However, after excluding property profits, it was down £6m with the improvement in gross margins and a strong operational performance being offset by cost inflation.
Sharon White, Chairman of the John Lewis Partnership, outlined their priorities for the year ahead which includes better serving their customers in John Lewis by refreshing their home offering to include more contemporary ranges with improved pricing and delivery. In addition, the John Lewis Partnership are significantly investing in Waitrose.com ahead of the partnership with Ocado ending in September 2020. In 2019/20, Waitrose.com experienced 13% sales growth. As a result, Waitrose are recruiting 2400 new Partners and building a new fulfilment centre to meet demand for Waitrose products online.
The John Lewis Partnership will be carrying out a strategic review which will focus on how to strengthen the core retail business and develop new services outside retail. Sharon White stated this will look at ‘right sizing’ across both brands which may result in new formats and locations, space reduction and closures where necessary. The strategic review is set to be completed by autumn 2020.