John Lewis Partnership anticipates significantly higher profits this year, marking a positive shift in its financial trajectory.
- The company’s pre-tax losses have narrowed substantially, with sales seeing a modest rise.
- The revival of the ‘Never Knowingly Undersold’ campaign, aided by AI, drives substantial website traffic and sales.
- Waitrose enjoys a sales boost, gaining market share for the first time in over two years.
- Improvements in product availability and store formats are contributing to a revitalized customer proposition.
John Lewis Partnership has firmly established itself on a path to recovery, projecting ‘significantly higher’ profits in the current financial year. The retailer’s strategy has narrowed pre-tax losses from £59 million to £30 million, alongside a 2% increase in sales to £5.9 billion. Shore Capital analyst Clive Black praises the company’s recovery, indicating a notable move out of troubled waters.
A pivotal aspect of this positive outlook is the relaunch of the ‘Never Knowingly Undersold’ price promise. This campaign, which had been previously halted due to high operational costs, is now revitalized with AI technology, aligning John Lewis’s prices with 25 other retailers, including M&S, Next, and Boots. Executive Director Peter Ruis highlights the tremendous impact, with significant boosts in sales and website visits climbing by 55,000 daily. The price promise’s influence extends across various product lines, including unexpected sectors like own-brand bedding and nursery items.
Waitrose enters a promising phase as well, boasting a 5% increase in sales for the first half of the year. According to Kantar, the grocer has finally gained market share, reaching 4.5% in July after two years. Executive Director James Bailey attributes this success to a variety of market avenues, such as competitive gains and bolstered lunchtime trade following the introduction of a meal deal. Investments totaling £39 million in price reductions have fortified Waitrose’s value proposition, attracting consumers back during a period of economic strain. Partnerships with notable brands like Ottolenghi and Gail’s have also played a role in enhancing its product range.
John Lewis has been focused on making the shopping experience more attractive by expanding its product ranges and integrating new brands like Loewe, Trinny London, and Stanley Tucci’s Greenpan. Significant investments have been made to improve the physical stores, with new beauty halls and the addition of a Waterstones bookshop in the Oxford Street location, enhancing the overall retail offering.
Waitrose’s store evolution is set to accelerate further with new shop formats and openings after a hiatus of over six years. The first of 100 new smaller Waitrose stores is scheduled to open in Hampton Hill, South West London. These developments, including an updated store format tested at Finchley Road, are expected to enhance the shopping experience with upgraded departments and innovative designs.
Lastly, both John Lewis and Waitrose have made strides in addressing product availability, a previous challenge, with Waitrose achieving record availability levels of 96.5%. The new ship-from-store technology at John Lewis will enhance online shopping, ensuring seamless delivery without the customer’s knowledge of the product’s origin. These developments signify a strong alignment with their core values of product, quality, and service.
The John Lewis Partnership’s strategic initiatives and investments depict a promising trajectory towards achieving significantly higher profitability.
