Waitrose store2

Waitrose has fallen to a statutory loss of £2.3m in 2021/22

Waitrose has fallen to a statutory loss of £2.3m last year after trading profits were heavily impacted by supply chain challenges and pandemic-related costs.

The supermarket swung to red from a profit of £126.3m the year before, according to newly filed accounts for Waitrose Ltd.

Its 2021/2022 full year earnings showed a combination of inflationary pressures within supply chains, higher levels of absence due to Covid-19 and growing fulfilment costs linked to its expanding online operations had “significantly diluted” its operating profit margins.

Profits were also impacted by the retailer paying £28m in Partnership Bonuses – the staff payments that been halted the year before due to Covid-19.

Waitrose said that mounting inflation and rising energy prices created uncertainties, but that it remained “focused on investing significantly in our Partnership Plan to transform and grow our business.”

Waitrose Ltd had not previously made a statutory loss in the past ten years.

The John Lewis Partnership had previously announced that Waitrose’s margins had contracted, to bring trading operating profit down £125m to £1bn during a year where sales fell 1% on a reported basis back to £7.5bn.

On Wednesday, JLP chairwoman Sharon White said during an ITV appearance that the prospective of inflation hitting double digits by the end of this year was set to affect the business even further.

White added that some of the retail business’s suppliers were raising their prices by “35% plus”.

“We’re trying to ensure that customers don’t feel the impact of that, but it’s an unprecedented time.”

Waitrose’s profit was also impacted by its £90m investment in 18 shop refurbishments, the expansion of its e-commerce capacity (including its partnership with Deliveroo), and the opening of ten new Waitrose cafes.

The company said it plans to continue to invest in its store estate, with another 23 major refurbishments planned for 2022/2023.

It is also increasing the number of Waitrose stores featuring dedicated John Lewis GM areas by a further 49 by the end of the next financial year as it is “continuing to realise the combined strength of the Partnership’s two brands”.

“We have made a good start to our Partnership Plan but are only one year through our five year transformation.

“Looking ahead, we see continued uncertainty from global events affecting the economic environment, our customers, Partners and society.”