John Lewis Forecasts Profit Surge Amid Successful Turnaround Strategy
John Lewis Partnership reports improved performance with narrowed losses and increased revenue. The retail giant expects significant profit growth this year as its transformation plan yields positive results.
The John Lewis Partnership, a renowned British retail giant, has announced expectations of "significantly higher" profits for the current fiscal year. This forecast comes as the company's turnaround strategy begins to show promising results.
The partnership, which encompasses both John Lewis department stores and Waitrose supermarkets, reported a "marked improvement" in its overall performance. In the six months leading up to July 2024, losses before tax and exceptional items decreased by 91% to £5m, while revenues saw a 2% increase, reaching £5.2bn.
Waitrose, the partnership's supermarket chain, celebrated its tenth consecutive quarter of customer growth. This achievement highlights the success of the company's focus on customer service and product quality. Waitrose, founded in 1904 and acquired by John Lewis in 1937, has a long history of innovation, including being the first UK supermarket to offer organic food in 1983.
However, the John Lewis department stores faced challenges, recording a 3% decline in sales amid a "challenging market" and the ongoing cost of living crisis. Despite this setback, the partnership remains optimistic about its future prospects.
Nish Kankiwala, the Chief Executive, expressed confidence in the company's direction:
"These results confirm that our transformation plan is working and we expect profits to grow significantly for the full year, a marked improvement from where we were two years ago."
The partnership's turnaround efforts appear to be on track, with the company returning to profitability last year for the first time since the pandemic. For the year ending January 2024, John Lewis recorded a pre-tax profit of £56m, a significant improvement from the £234m loss in the previous year.
As part of its renewed focus on retail, the partnership has reintroduced its iconic "Never Knowingly Undersold" price promise, which was originally introduced in 1925. This move demonstrates the company's commitment to competitive pricing and customer value.
Looking ahead, John Lewis plans to invest £1bn in new and existing sites over the next three years, including the opening of its first new Waitrose stores in six years. This expansion strategy aligns with the partnership's renewed focus on its core retail business.
The John Lewis Partnership, founded in 1929, is known for its unique employee-owned structure, with staff members referred to as "Partners". This model, along with the company's profit-sharing scheme, has contributed to its reputation for ethical business practices and employee satisfaction.
As the partnership prepares for a leadership transition, with Jason Tarry set to take over as chairman later this month, it continues to adapt to changing market conditions while maintaining its commitment to customer service, quality, and sustainability.
