John Lewis credits focus on value and trust as sales top £9bn

The John Lewis Partnership says its focus on value and trust helped annual revenues at its department stores and Waitrose supermarkets top £9bn for the first time last year. 

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John Lewis credits the huge success of its Christmas marketing campaign for boosting sales and profits.

The department store group reported a 6.6 per cent increase in revenue to £9.03bn in the year to 25 January 2014. Profit was up 9.6 per cent, although both figures are down on last year, when revenue increased 9.2 per cent and profit was up 15 per cent, as an uptick in the economy failed to filter through to consumer spending.

At John Lewis, the group says commitments including “Never Knowingly Undersold” and a new guaranteed two-year warrantee on all electrical goods helped boost sales. It adds that its Christmas marketing campaign, the animated feature the Bear and the Hare, was a huge success, attracting 12m views on YouTube, while the my John Lewis card has signed up more than 500,000 members since it launched in October.

The group claims it has now increased market share in both parts of its business for five consecutive years having invested in key areas including new online platforms for both brands, expansion of the click and collect service and greater personalisation through the myWaitrose and my John Lewis loyalty schemes. Charlie Mayfield, chairman of the group, says the business is now “well positioned” for further growth.

The group says it is now working on further ways to integrate its online and offline businesses, including a trial of drive-through collections and collection lockers at Waitrose. John Lewis recently announced plans to open its first technology incubator as it looks to keep ahead of changes in retail.

“There are fundamental changes taking place in retail, especially customer attitudes towards value, convenience and personalisation. For several years we have been adapting our business to take advantage of these changes.

“I am confident that however quickly the UK economy emerges from this prolonged period of slow growth, the Partnership is well positioned to continue to strengthen its competitive position and to grow market share in both Waitrose and John Lewis,” says Mayfield.

Sales at John Lewis stores open for more than a year increased 6.4 per cent while profit was up 11 per cent. Online sales were up 19.2 per cent to £1.1bn, with 50 per cent of traffic coming from mobile and tablets.

At Waitrose, like-for-like sales were up 5.1 per cent, while operating profit increase 6.1 per cent to £310.1m. Online sales were up 41.4 per cent, while 2.5m John Lewis click and collect orders were picked up from Waitrose.

“The myWaitrose card is allowing us to deepen our relationship with our customers, we are growing our online business and, through more services and hospitality we are creating additional reasons to visit our branches. Our customer service, high quality products, breadth of range and value offer continue to resonate with customers,” says the group.

John Lewis’s 91,000 staff will share a bonus pot of £202.5m, equal to 15 per cent of annual salary. That is down from 17 per cent last year as the John Lewis Partnership attempts to plug its pension deficit.

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