Waitrose has reported a drop in sales of 3% to £7.31bn, with the John Lewis Partnership seeing a total loss of £234m in the year to 28 January as the group experienced inflationary setbacks.
As a result, chairman Sharon White told Partners in a letter today (16 March), that this “means we won’t be able to share a bonus this year or do as much as we would like on pay.”
While the past year saw a rise in customers of 7% to 13.7 million, Waitrose saw shoppers as a whole purchase less amid the cost-of-living crisis.
White also attributed this sales decline to the “big online growth” of the pandemic years being “partly reversed” and as “shoppers shifted some of their grocery spending to the discounters.”
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White said that upmarket retailer has been “negotiating better deals with suppliers and simplifying ranges,” she added that Waitrose had “set-backs” with product supply challenges and “a major fire in our Brinklow warehouse hit availability in Waitrose last summer.”
“All in all, this has made for a tough set of results.”
The impact of inflation was felt across the Partnership, adding £179m to its costs in the year.
In a bid to help its Partners through the challenging financial period, the Partnership spent £32m on a cost of living payment and free food over the winter.
Although Waitrose won’t be offering partners their yearly bonus, White said that it will “continue to help with the cost of living in other ways – the financial assistance fund will stay at £800,000 (a doubling) and there is support for travel, childcare and living costs.”
However, despite the challenges, Waitrose said that its customers benefitted from its expansion into the convenience market last year and is continuing to do so through tie-ups with Dobbies and Shell, and partnering with exclusive brands including Gail’s and Plants by Deliciously Ella.
Having been faced with a “challanging environment”, White added that looking ahead, the Partenrship Plan has been adapted “to improve the profitability of the business, tripling our target for efficiency savings from £300m to ~£900m by January 2026.”
“The mantra for the year is cost out, margins up and customer focus.”
