John Lewis cites marketing and brand for sales boost

The John Lewis Partnership has credited marketing and the strong brand values held by its department store and Waitrose supermarket chains for its latest yearly sales and profit increases.

John Lewis

The department store group reported a 9.2 per cent rise in revenue to £8.47bn in the year to 26 January 2013. Profit increased 15 per cent during the year meaning all staff will share a bonus pot of £210.8m – the equivalent to 17 per cent of annual salary.

Sales at John Lewis department stores open for more than a year increased 10.5 per cent year on year while profit soared 37.2 per cent. Online sales increased 40.8 per cent during the year, accounting for £959m worth of sales.

The group says “exciting products, knowledgeable customer service and effective marketing” including its Olympic sponsorship, alongside its Never Knowingly Undersold pledge helped boost John Lewis’ performance.

Same store sales at Waitrose increased 6.7 per cent to £5.76bn, with profit up 12.2 per cent to £292.3m. Online sales increased 49 per cent.

The Waitrose Brand Match promise and the extension of its Essentials value range helped increase customer transactions by 6.1 per cent, the Partnership said.

Performance across the group was also boosted by its focus on multichannel shopping allowing customers to shop by mobile, online, supermarkets, convenience and small-format department stores as well as the roll out of John Lewis click and collect.

Click and collect orders at the department store chain have doubled year on year and 43 per cent of orders are now collected through Waitrose stores, which has boosted footfall at the supermarket chain.

Charlie Mayfield, chairman of the John Lewis Partnership, says: “Although the market remains challenging, the Partnership has adapted quickly and successfully and we saw the benefits this year.

We have stepped up innovation in new products, there’s been a continuing focus on value and sustained and rapid growth online. We see this as a time of significant opportunity in a changing market.”

Mayfield adds there is a “quiet revolution underway” across its supply chain, IT and support functions to make sure the partnership remains able to respond quickly to changing market conditions and shopping behaviours.

Despite the chain’s success Mayfield expects sales to slow this year, compared with the last 12 months.

Neil Saunders, managing director of Conlumino says John Lewis’ “appetite for innovation, willingness to invest and relentless focus on understanding, and delivering for, the customer” have paid off, also crediting the group’s partnership model for driving success.

He says: “In these days of bean-counting and financial shenanigans too many retailers are seen, first and foremost, as cash machines whose primary purpose is simply to make as much money as possible in as short a time frame as possible regardless of longer term consequences. Partnership is a defence against such trends.”

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