A significantly higher level of investment and one-off items have bitten a large chunk out of Waitrose’s operating profits.
January year-end operating profits fell 23.4% to £237.4m, or down 24.4% on a 52-week basis. Sales on a like-for-like basis climbed 1.4% excluding petrol.
The supermarket group enjoyed continued growth in customers numbers – up 6%.
Customer transactions climbed an average of 400,000 a week while online grocery sales increased 31.2% and average order value rose 5%.
Sir Charlie Mayfield, chairman of John Lewis Partnership, said the market remained challenging in grocery with Waitrose gross sales up 9% – 2.8% like-for-like, excluding petrol.
“Against the backdrop of a tough market where prices are falling and customer shopping patterns are changing, our strategy of investing to create the modern Waitrose has supported us in increasing sales, growing customer transactions and gaining market share,” he said.
“As a co-owned business we are able to take the long-term view and so we have invested in new and existing space, improving our IT capability and strengthening our supply chain.”
Waitrose had also continued to build its online business, convenience offer, hospitality and services in its branches and, through the myWaitrose card, its understanding of its customers.
Thirteen new supermarkets and 20 convenience shops opened during the period and nearly 5,000 new or improved products were added.
“The launch costs associated with this opening programme and the expected lower returns from new space in the early months impacted profits this year,” Sir Charlie said.
Work has started on the first national distribution centre in Milton Kenyes, which is scheduled to open this summer.