'Posh' Waitrose Adds a Bit of Class to Surging Sales at John Lewis
Byline: Simon English
WAITROSE showed today that it is fending off the challenge posed by the discount supermarkets and that it has thrived despite the recession.
When the economic downturn began, some analysts feared the stores would prove too posh to prosper and that cheap rivals such as Lidl and Aldi would grab its share of the market.
Today the grocer owned by the John Lewis Partnership ( JLP) said sales in the half-year to August jumped by 7.4% to [pounds sterling]2.2 billion. Even like-for-like sales, which strip out the effect of expanded store space, rose 1.8%. Those took profits to [pounds sterling]121 million, a rise of 19%.
John Lewis chairman Charlie Mayfield was delighted: "It is a really strong bounceback from Waitrose. We launched the 'essentials' range which cut prices but kept the same quality and customers have loved it."
The wider John Lewis group can also claim to have prospered during the downturn, grabbing market share in both fashion and electronics. However, the home furnishings arm has been bitten by the lack of activity in the housing market, said Mayfield.
"This time last year conditions were horrible. But we prepared well for the recession. We nailed everything down very tightly and things have not turned out as bad as we first feared," he added.
Sales across JLP rose 3.5% to [pounds sterling]3.4 billion. Pre-tax profits slid 20% to [pounds sterling]86 million, which suggests the partners -- all staff -- may see a lower bonus this year. The bonus pool is announced with full-year results in six months' time. Typically, John Lewis pays out half of its profits, with all staff getting the same percentage of their salary in bonus -- last year it was 13%.
John Lewis has almost 70,000 employees. Founded in 1864, it has since grown into the third-largest private company in the UK. Its unusual corporate structure is seen by some as a direct challenge to the orthodoxy that shareholder-owned companies are most likely to succeed.
Mayfield said: "Our structure means that we can continue to invest through a downturn. …