Robust sales for Waitrose and John Lewis

In the half year, Waitrose saw sales rise by 7.8 per cent while John Lewis sales rose by 6.6 per cent.

A very robust set of results from the Partnership are tempered only by the fact profit, on a before tax basis, was down some £42.9m to £68.5m; something that will, ultimately, impact on next year’s bonus pot. However, given that this fall was the result of exceptional items (mostly an adjustment due to changes in holiday pay policy), while disappointing it is not indicative of the underlying performance of the business. Indeed, when exceptional items are stripped out, the Partnership’s profit increased by 3.9 per cent or £4.4m.

Profit aside, the sales numbers clearly demonstrate that despite its good run of growth, the Partnership remains firmly on the front foot with both sides of its business notching up very strong performances.

In our view, the biggest single weapon in the Partnership’s armoury remains its ability to take a long term view of the market and invest appropriately in areas that it sees as delivering future value. This is certainly a function of the freedom which comes from being an employee owned, rather than a public, company. It is also, however, down to the culture and attitude of the business and its management which have, over the past 5 or so years, injected a real sense of pace and purpose throughout the organisation.

John Lewis

Off the back of a strong set of comparatives John Lewis has maintained its momentum and confirmed that it remains one of the success stories of British retail. While recent years have seen sales propelled by a strong programme of new store openings, the latest like-for-like figures – which significantly outstrip those of total UK retail – underline the fact that investments in stores, systems and assortments are all helping to drive growth across the business.

Despite its performance, John Lewis remains paranoid about becoming complacent which has helped to foster culture of energetic self-appraisal and reinvention. This, in a market which is rapidly shifting and reshaping, is one of the keys to its continued success. Indeed, it would not be unreasonable to say that John Lewis is firmly in the vanguard of innovative and forward thinking retailers.

The practical implication of all this is that, to consumers, the offer, service and proposition are perhaps more relevant today than they have ever been. For example, in fashion John Lewis has been quick to respond to the flight to quality with brands such as Alice Temperly and John Lewis & Co – both of which have a strong appeal to clearly defined target audiences. Equally, John Lewis has been responsive to the greater demand for personalisation and customisation in home products with its "bespoke" upholstery service. Innovation also extends to online where, as well as an extensive overhaul to the website, new delivery options such as Collect Plus have been trialled.

If innovation is important, it is nothing without proper execution. This is another area in which John Lewis arguably excels. Although the company has a lot on its agenda, it usually takes the time to think changes through and ensure they are properly delivered. The upshot is that the vast majority of the developments it puts in place deliver good returns.

Current and past success is all well and good; however, maintaining this for the future is what really counts. On this front, we hold with our view that John Lewis will significantly outperform the market over the medium term. A new pipeline of stores, further range innovation, continued investment in the website and fulfilment, and strong marketing campaigns will all underpin future growth. It is also true that despite the fact the business is now much larger than it was 5 years ago it still has massive headroom for growth in terms of both new customer acquisition and geographical expansion.

Waitrose

In a flat grocery market Waitrose put in a stellar performance with significant advancements in both total and like-for-like sales. This comes off the back of a long period of market outperformance, over which time the grocer has successfully grown its market share against the backdrop of a very tough, competitive trading environment.

Particularly pleasing is the success of the online operation, where sales were up by 40.6%. This is the result of both strong marketing and investment in fulfilment capacity to increase slot availability for consumers.

Innovation remains at the heart of Waitrose’s success. On the food front this manifested itself in the redevelopment of the Menu range, an enhancement and extension of home-baking products, and extending the premium Heston range of products to new categories. Outside of food Waitrose has also been proactive in seeking out new sales opportunities, such as in gardening where it developed a new horticulture range designed to appeal to its largely green-fingered customer base. In a market where food volume growth will remain sluggish, indentifying such incremental sales opportunities has become increasingly important and is something that will deliver growth for Waitrose over the longer term.

Store investment and enhancement will also help drive sales over the medium term and is also important in terms of allowing Waitrose to maintain its service differentiation. In this regard the new service desks the company is introducing will help improve service standards for click-and-collect shoppers as well as underlining many of the (often previously ‘hidden’) added-value service Waitrose offers, such as flower wrapping and the loan of glasses or fish kettles.

Although the grocery market will remain challenged in terms of volume growth, our view is that Waitrose will continue to build share. A combination of new store openings, a continued commitment to value, the growth of convenience and online, and some conservative expansion of the non-food offer will all underpin this success.

Photograph: Getty Images

 Managing Director of Conlumino

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Commons Confidential: Dave's picnic with Dacre

Revenge is a dish best served cold from a wicker hamper.

Sulking David Cameron can’t forgive the Daily Mail editor, Paul Dacre, for his role in his downfall. The unrelenting hostility of the self-appointed voice of Middle England to the Remain cause felt pivotal to the defeat. So, what a glorious coincidence it was that they found themselves picnicking a couple of motors apart before England beat Scotland at Twickenham. My snout recalled Cameron studiously peering in the opposite direction. On Dacre’s face was the smile of an assassin. Revenge is a dish best served cold from a wicker hamper.

The good news is that since Jeremy Corbyn let Theresa May off the Budget hook at Prime Minister’s Questions, most of his MPs no longer hate him. The bad news is that many now openly express their pity. It is whispered that Corbyn’s office made it clear that he didn’t wish to sit next to Tony Blair at the unveiling of the Iraq and Afghanistan war memorial in London. His desire for distance was probably reciprocated, as Comrade Corbyn wanted Brigadier Blair to be charged with war crimes. Fighting old battles is easier than beating the Tories.

Brexit is a ticket to travel. The Independent Parliamentary Standards Authority is lifting its three-trip cap on funded journeys to Europe for MPs. The idea of paying for as many cross-Channel visits as a politician can enjoy reminds me of Denis MacShane. Under the old limits, he ended up in the clink for fiddling accounts to fund his Continental missionary work. If the new rule was applied retrospectively, perhaps the former Labour minister should be entitled to get his seat back and compensation?

The word in Ukip is that Paul Nuttall, OBE VC KG – the ridiculed former Premier League professional footballer and England 1966 World Cup winner – has cold feet after his Stoke mauling about standing in a by-election in Leigh (assuming that Andy Burnham is elected mayor of Greater Manchester in May). The electorate already knows his Walter Mitty act too well.

A senior Labour MP, who demanded anonymity, revealed that she had received a letter after Leicester’s Keith Vaz paid men to entertain him. Vaz had posed as Jim the washing machine man. Why, asked the complainant, wasn’t this second job listed in the register of members’ interests? She’s avoiding writing a reply.

Years ago, this column unearthed and ridiculed the early journalism of George Osborne, who must be the least qualified newspaper editor in history. The cabinet lackey Ben “Selwyn” Gummer’s feeble intervention in the Osborne debate has put him on our radar. We are now watching him and will be reporting back. My snouts are already unearthing interesting information.

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution