Waitrose has overtaken its department store sister as the financial engine of the John Lewis Partnership, according to the latest financial figures. The grocery arm generated £256m in adjusted operating profit in the year to 31 January, a figure that dwarfs the £58m delivered by John Lewis, despite both businesses reporting sales growth.
£1bn investment fuels supermarket growth
Waitrose sales jumped seven per cent to £8.5bn during the period, with volumes rising three per cent. The supermarket is currently investing £1bn into its operations, a sum that includes plans to refurbish 28 shops this year after completing 23 upgrades previously. The programme targets the entire estate, including convenience and neighbourhood formats, alongside new distribution centres and digital channels.
The investment is already paying off. Waitrose attracted five per cent more shoppers in its latest financial year than two years earlier, while online sales rose more than 13 per cent. Its premium Waitrose No.1 range grew by almost 30 per cent, suggesting the brand is successfully capturing a specific demographic willing to pay for quality.
While the supermarket enjoys a period of expansion, the wider partnership faces headwinds. The group recorded a £21m statutory pre-tax loss after £120m of exceptional charges, largely linked to writing down legacy technology systems. Sales across the entire Partnership rose five per cent to £13.4bn, with underlying profit increasing six per cent to £134m.
Department store overhaul faces hurdles
John Lewis is also undergoing a £800m transformation programme aimed at revitalising its department stores and attracting shoppers. The retailer is investing £50m across five stores this year, including a more than £20m redevelopment of its Glasgow branch, alongside upgrades in Cambridge, Leicester, Reading and Liverpool.
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Elsewhere, John Lewis is expanding its hospitality offering through a new Platter John Lewis format, which is set to be rolled out across 32 cafés and restaurants by the end of 2027. It has also launched a new Sports & Wellness concept at Oxford Street, with Liverpool, Cheadle and Glasgow to follow, bringing together sportswear, technology and specialist services.
The turnaround at the department store is proving more difficult than the supermarket’s expansion. The Sunday Times reported that the Partnership is investing a total of £1.8bn into both brands, but noted that weak consumer confidence and pressure on big-ticket spending are complicating efforts to modernise the high street.
John Lewis increased adjusted operating profit by £13m to £58m in its last financial year and said refurbished stores had consistently delivered sales growth following investment. However, the retailer is facing a challenging environment. Chair Jason Tarry recently warned employees that the business was facing “really tough” trading conditions and expected to contend with lower sales and higher costs. The Partnership is due to publish its first-half results on 10 September.
These difficulties have contributed to recent management changes. John Lewis managing director Peter Ruis is stepping down on 6 September after less than three years in the role. He will be succeeded in mid-September by Will Kernan, the Partnership non-executive director and former chief executive of River Island, The White Company and Wiggle.
Waitrose’s substantial investment in its estate and digital channels positions the grocery brand as the primary driver of the Partnership’s financial health. The strategy to expand online and refresh physical locations is clearly resonating with consumers seeking quality and convenience. [1] The expansion strategy mirrors the aggressive approach seen by other retailers adapting to modern shopping habits.
