Waitrose delivered stronger sales growth in the first half of the year, helping lift overall John Lewis Partnership sales by 2 per cent to £6.3 billion, despite a tougher trading environment and continued investment weighing on profitability.
Waitrose sales rose 4 per cent to £4.3bn in the six months, while adjusted operating profit fell £7 million to £103m. Its operating margin declined to 2.6 per cent, from 2.8 per cent a year earlier, as the retailer absorbed higher operating costs and stepped up investment in lower prices and customer loyalty.
The performance contrasts with John Lewis, where sales fell 2 per cent to £2bn as weaker consumer demand for larger discretionary purchases continued to affect trading. Its adjusted operating loss widened to £83m, from £53m last year.
Across the Partnership, loss before tax and exceptional items increased to £89m, compared with £34m in the same period last year. The business said the result reflected deliberate long-term investment, tougher trading conditions, particularly in general merchandise, and higher costs.
“Our first-half results reflect our continued investment in our transformation, a more challenging trading environment and the increased costs of doing business,” Jason Tarry, chairman of the John Lewis Partnership, said.
“Partnership sales grew, customer satisfaction remains strong and the stores we’ve transformed are outperforming the rest of our estate. That gives us confidence in the commercial headroom for both Waitrose and John Lewis.”
Waitrose builds momentum
The company said the ‘Home of Food Lovers strategy continued to resonate with Waitrose shoppers, with sales of its No.1 range increasing 15 per cent and online sales up 11 per cent.
The supermarket launched more than 540 new own-brand products during the half and invested a further £20m in permanently lower prices. A similar investment is planned later this month, taking its total investment in lower prices since 2023 to more than £180m.
The retailer also stepped up investment in loyalty, with Net Promoter Scores for its loyalty offer increasing by 20 points year on year.
Fifteen stores were modernised during the period, with completed refurbishments reporting improved sales and customer satisfaction. Electronic shelf-edge labels were rolled out to 225 stores, while three new sites were acquired, including full-line supermarkets in Hale Barns and Cricklewood.
Work also began on Waitrose’s first South West distribution centre at Avonmouth. The facility is expected to create more than 550 jobs and serve around 50 stores from early 2027.
Investment accelerates
Partnership investment increased 29 per cent to £246m in the first half as the group accelerated store refurbishments, technology modernisation, supply-chain automation and inventory management projects.
The company said it remained on course to invest around £600m during the full year.
The Partnership also increased annual pay by £108m, taking total investment in Partner pay to more than £400m over the past four years.
Tarry said the employee-owned structure allowed the business to take a longer-term approach.
“We are managing the business with discipline and have chosen to keep investing in our customers, Partners and the long-term strength of our brands,” he said.
“While losses grew in the half, our employee-owned model allows us to take that longer-term view, supported by our financial strength.”
The company said it remained cautious about the second half, with the wider economic and geopolitical environment continuing to weigh on consumers. It noted that, as in every year, the majority of its profit is earned in the second half, meaning the full-year result will depend heavily on peak trading.
“We remain focused on doing the right things for our customers and continuing to invest through the cycle,” Tarry said. “With peak ahead, we are excited about our plans across John Lewis and Waitrose and look forward to making the festive season special for all our customers.”