Waitrose has defied the economic gloom with a 3% jump in annual profits.
Operating profits were up £8.1m to £274.9m for the 12 months to the end of January, with like-for-like sales up 4%.
Overall sales were up by 9.8% to £4.1bn, as new stores, greater use of promotions and the retailer’s most high-profile marketing push to date helped draw an extra 300,000 shoppers a week.
But managing director Mark Price conceded that Waitrose had seen its margins suffer as shoppers grew their average basket with promotions and the cheaper Essentials range.
Price said Waitrose had “increased the number of promotions as customers look for them” and said discounted items accounted for around 27% of sales, up from 19% the year before.
The supermarket is now running around 1,000 promotions a month compared to between 600 and 700 the previous year.
During the year Waitrose opened 20 new stores and grew its retail space by almost 6%, stepping up the rollout of its smaller-format convenience stores.
Price today unveiled plans for 40 new stores that would add 300,000 sq ft further retail space to its estate.
The upmarket retailer has also re-launched its online service following a £10m revamp of waitrose.com.
Meanwhile, parent company the John Lewis Partnership grew its profits by 10.6% to £431m.
JLP chairman Charlie Mayfield said: “The consumer is clearly feeling the strain and confidence is fragile but I believe we will come through that. It won’t be plain sailing but I think [the economy] will return to a slow growth maybe around Easter.”
Waitrose celebrates web re-launch by planting trees (8 March 2011)
JLP profits ‘at least £250m’ from Ocado (28 February 2011)
Waitrose emails a million to kick-start London online push (21 February 2011)