Booming Waitrose powers John Lewis to bumper profits

The John Lewis Partnership sees annual profits jump 10%, thanks (partly) to a big year for Waitrose.

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Last Updated: 06 Nov 2012

2009 may have been a tough year for the high street, but it was a hugely successful one for Waitrose: the posh food purveyor saw profits soar by 27% to £268m, while it’s now attracting an extra 400,000 shoppers through its doors every week. This helped the John Lewis Partnership as a whole enjoy a 9.7% rise in full year pre-tax profits to £306.6m, as a result of which its  ‘partners’ will share a bumper bonus pot of £151m. Chairman Charlie Mayfield said it was a year of ‘profound change’ for Waitrose – and although he still sounds a bit nervous about 2010, he’s planning to continue its rapid rate of expansion. Meanwhile Morrisons is also looking to the future – but it’s a bit trickier without a CEO...

The John Lewis department stores didn’t have a bad year by any means; after a slow start to the year, they still managed to chalk up a 15% hike in profits as customers started trickling back to the shops (and we’re prepared to wager that that its brand is held in higher esteem than ever after the last year, given the amount of gushing coverage its ‘partnership’ model gets these days). But there was no doubting the real star of the show: upmarket food chain Waitrose. The launch of its Essentials range has clearly been a big hit, while it opened 25 new stores (including 13 ex-Co-ops). This year it’s planning to open another 22, while MD Mark Price reckons it can double turnover to £10bn in the next decade.

All of which was great news for the 70,000 partners, who’ll get a bonus equivalent to 15% of their salary - more than they seem to have been expecting. And happily, growth at the Partnership shows no sign of slowing: in the first five weeks of the new financial year, total sales were up 13.5% on the same period last year.

Morrisons is another supermarket to have had a terrific recession, of course (in fact its like-for-like sales growth was even better than the 3.6% enjoyed by Waitrose). The chain, which is currently leaderless after CEO Marc Bolland quit for M&S, recorded revenue growth of 6% in the 12 months to 31 January, while pre-tax profits were up 21% to £767m (enabling bosses to hike the dividend by almost half). Morrisons attributed this success to a combination of value and its fresh food offering.

Like Waitrose, it’s also expanding, with 60 larger store openings planned for the next three years. But with Bolland’s successor Dalton Philips not taking over the hot seat until the end of this month, it’s presumably been a lot more difficult to plan ahead...


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