Waitrose feels the pressure as profit declines
The John Lewis Partnership warned yesterday that the grocery market would remain tough for some time, as a strong performance across its department stores helped offset a decline at its grocery chain Waitrose.
The middle-class food retailer, which accounts for about two-thirds of the group’s sales, has grown its share of the market thanks to shoppers spending more at discount and upmarket grocers, squeezing those that occupy the middle ground such as Morrisons.
But it has also come under pressure from rising competition, with operating profit before exceptional items falling by 9.4 per cent to £145.2m in the half year to 26 July.
The retailer said store openings, refurbishments and increasing its online capacity had also contributed to the decline.
John Lewis posted a 62.2 per cent rise in operating profits across its department stores arm to £56.3m, pushing overall group profits up by 8.6 percent to £176.1m.
Sales at Waitrose rose by 1.3 per cent thanks to 15 new store openings in the period, and by 8.2 per cent at the group’s department stores. Online sales were up 25.6 per cent.