John Lewis Partnership is on track for significantly higher profits, marking a positive turnaround.
- The company’s pre-tax losses have narrowed, and sales have increased to £5.9 billion.
- John Lewis has relaunched its ‘Never Knowingly Undersold’ pledge, boosting web traffic and sales.
- Waitrose’s sales are up 5%, with new customer gains and enhanced product offerings.
- Both brands report improved in-store and online product availability, setting the stage for a strong performance.
The John Lewis Partnership, alongside Waitrose, is poised for a financial upswing as it projects substantially improved profit margins this fiscal year. This outlook stems from a significant reduction in pre-tax losses, from £59 million to £30 million, alongside a 2% rise in sales, reaching £5.9 billion. According to Shore Capital analyst Clive Black, the company is showing promising signs of recovery, indicated by its emergence from critical financial challenges.
Integral to this positive sentiment is the revival of the ‘Never Knowingly Undersold’ price pledge, a strategic initiative abandoned two years prior due to unsustainability. Leveraging artificial intelligence to competitively align its prices against 25 retailers, John Lewis has witnessed an extraordinary increase in both sales and website traffic, with daily organic visits surging by 55,000. Executive Director Peter Ruis highlights the comprehensive impact across product assortments, notably in unexpected sectors like own-brand bedding and nursery items.
Waitrose reports a robust 5% sales increase in the first half of the fiscal year, with market share gains for the first time in over two years. These advancements are attributed to diverse market dynamics, including heightened lunchtime trade fueled by strategic meal deals, and significant investments totalling £39 million in price reductions and product range enhancements. New partnerships and improved value propositions are driving this growth, setting Waitrose up for a potentially prosperous golden quarter.
Peter Ruis has been instrumental in steering John Lewis through transformative changes in his recent tenure. Preparations for the peak season include strategic investments in expanding product ranges and partnerships, alongside significant upgrades in physical store environments. The addition of new beauty halls and innovative in-store computing, complemented by enhanced staffing and technological advancements, reflect a comprehensive effort to augment the customer experience.
A key operational improvement for both John Lewis and Waitrose has been striking enhancements in product availability, both online and in-store. Waitrose reports record availability levels at 96.5%, and John Lewis is launching a new ship-from-store technology. This technology ensures seamless integration between store inventory and online purchasing, reflecting a commitment to customer service excellence and operational efficiency.
John Lewis Partnership’s strategic initiatives and operational improvements position it well for a profitable turnaround and optimistic future.
