Investing in giving customers what they want in a fast-changing market helped the John Lewis Partnership drive gross sales up 9.3% last year, the retailer said today.
The £811.8m boost brought gross sales to £9.54bn in the year to January 26 2013. Revenue, which is adjusted for sale-or-return sales and excludes VAT, was £8.47bn, up by £706.9m or 9.1%.
Operating profit was £452.4m, an increase of £59.1m, or 15.0% on last year, while operating profit margin increased by 0.3% to 5.3%.
Profit before Partnership Bonus and tax was £409.6m, an increase of £55.8m, or 15.8%, on last year.
The results mean that employees, or Partners, will each bag a 17% bonus – almost nine weeks’ pay.
At John Lewis, the department store and online business, combined gross sales put on 13.5% – up £448.3m to £3.78bn, while revenue also rose 13.5%, or £363.1m, to £3.05bn. Like-for-like sales were up by 10.5%, and operating profit put on an impressive 37.2%, up £58.8m to £216.7m.
Sales in the shops increased 6.4%, with like-for-like shop sales up 2.6%, while at the johnlewis.com online business sales soared by 41%.
Waitrose achieved gross sales of £5.76bn, up 6.7% to £363.5m, and revenue of £5.42bn, a 6.8% increase to £343.8m. Operating profit rose 12.2%, or £31.7m, to £292.3m.
Four new John Lewis shops opened during the year – one new format shop and three John Lewis at Home stores. That helped the retailer’s home business grow 6.2%, and it now has the second largest home market share in the UK.
John Lewis also increased its efforts to deliver a seamless omni-channel experience. johnlewis.com now accounts for over a quarter of trade, and two-thirds of all transactions involve customers visiting both shops and online channels.
The retailer says click-and-collect is a key part of this change in shopping behaviour and is its fastest-growing fulfilment channel. Orders have almost doubled year-on-year, with 43% of purchases collected from Waitrose branches.
John Lewis also launched its Made in the UK identifier, and during 2012 the number of UK suppliers increased from 132 to 156.
JLP chairman Charlie Mayfield said he had been encouraged by the Partnership’s acceleration in sales growth during the year, particularly in the final quarter, and added: “We see this as a time of significant opportunity in a changing market.
“Behind the scenes, therefore, there’s a quiet revolution underway in our supply chain, IT and support functions. Our investment in these areas is up substantially and that commitment continues into 2013. In recent years, the Partnership has consciously invested to have the right skills, systems and organisational structures to be able to offer customers what they want in a fast-changing market.”
He said he expected sales growth to continue this year, albeit less strongly, and that JLP was planning a significant step up in total investment, with a particular focus on the supply chain, technology and systems.