TLDR:
- John Lewis Partnership reduced first-half losses from £57 million to £30 million
- Waitrose sales grew 5% with volumes up 2%
- John Lewis stores saw a 3% sales decline
- The company expects significantly higher full-year profits than last year’s £42 million
- Former Tesco executive Jason Tarry is set to become the new chairman
John Lewis Partnership, the UK-based retail group that owns Waitrose supermarkets and John Lewis department stores, has reported a significant improvement in its financial performance for the first half of 2024.
The company has managed to narrow its losses and is now projecting a more positive outlook for the full year.
In the six months ending July 27, 2024, John Lewis Partnership posted a loss of £30 million, a substantial reduction from the £57 million loss reported in the same period last year.
This 47% decrease in losses signals a positive trend for the company’s ongoing turnaround efforts.
Waitrose, the group’s upmarket grocery chain, emerged as a bright spot in the report. The supermarket division saw a 5% increase in sales, accompanied by a 2% rise in volume.
This growth has been attributed to new partnerships, including collaborations with chef Yotam Ottolenghi and the health app Zoe. Waitrose’s market share now stands at 4.6%, according to recent Kantar figures, indicating its strong position in the competitive UK grocery sector.
However, the John Lewis department store side of the business faced more challenges. Sales in this division declined by 3%, reflecting the difficult environment for general merchandise retailers.
The company cited poor weather conditions during the British summer and a squeeze on consumer spending as factors affecting fashion sales.
There was lower demand for big-ticket items, although some categories like cookware and smart wearables performed well.
Future Outlook and Strategic Plans
Despite the mixed performance across its divisions, John Lewis Partnership is optimistic about its full-year prospects.
The company expects to deliver significantly higher profits for the full year compared to the £42 million reported in the previous year.
This projection is based on the improved performance at Waitrose and the typically stronger second half of the year, which includes the crucial Christmas trading period.
Looking ahead, Waitrose has ambitious expansion plans. The supermarket chain intends to open up to 100 new convenience stores over the next five years and refurbish some of its existing shops. This strategy aims to capitalize on the positive momentum in the grocery segment and further strengthen Waitrose’s market position.
Leadership Transition
A significant change in leadership is set to take place at John Lewis Partnership. Jason Tarry, former head of UK and Ireland for Tesco, is preparing to take over as chairman of the employee-owned group.
He will replace Sharon White, who has led the company since 2020 and guided it through the challenges of the COVID-19 pandemic and the subsequent cost-of-living crisis.
Tarry’s appointment comes at a crucial time for the partnership. His experience in the retail sector, particularly with a major competitor like Tesco, is expected to bring fresh perspectives to John Lewis’s ongoing transformation efforts.
The new chairman will be tasked with driving the next phase of the group’s modernization, focusing on its core retail business and growth strategies.
