Waitrose is planning a fresh round of price cuts to help it maintain its growth, which has helped power its parent John Lewis back into profit.
Last month, the upmarket grocer invested £30million to cut the price of over 200 products. Executive director James Bailey said that it will follow that up with further reductions, as a combination of sales growth, cost savings and productivity improvements have given it the financial firepower to invest further.
He said: “We invested a few weeks ago and we’ll be investing again very soon. Price will be always part of our consideration and we’ve got money in our plan to keep investing in value for our customers for the next four years.”
Additionally, he said that Waitrose is planning to open new sites, a mix of supermarkets and convenience stores, for the first time in over a decade.
Price reductions helped Waitrose attract a record 15 million shoppers over the 52 weeks to January 27, an increase of 8%. That helped send the supermarket’s sales up 5% to £7.7billion and its operating profits by 19% or £170million to £1.1billion.
The improvement at Waitrose more than offset a 4% sales decline at John Lewis’ namesake department stores, due to the tough retail environment and in particular, weak sales of home and technology products. Although its sales fell to £4.8billion last year, its operating profits improved 1.9% to £689million due to efficiency savings and increased productivity.
John Lewis overall saw its 2023/24 revenues rise 2.4% to £10.8billion, and it swung from a pre-tax loss of £234million to a profit of £56million.
Chairman Dame Sharon White was bullish and said that the mutual’s return to profit will enable it to invest further in its businesses and increase staff pay. John Lewis scrapped its annual employee bonus in favour of increasing basic pay on average 10% at a cost of £116million.
“Our plan is working, while we know there’s much more to do,” she said. “We will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our partners.”
