John Lewis Partnership has returned to profit following a period of losses as it enters a year of “significant investment” to refresh its plan.

Waitrose Letterhead

JLP plans to invest in the retail business, including opening new Waitrose stores

For the 52 weeks to January 27, 2024, JLP reported profit before tax and exceptional items of £42m, a £120m improvement on the year before, which saw a loss of £78m.

However, the business also confirmed it will not be awarding a partnership bonus this year to focus on investing in the retail businesses and base pay. JLP is making a record investment by increasing overall pay in 2024 by £116m.

The partnership said the improved financial results were driven by “sales growth, gross margin rate improvement and sustainable productivity improvements”.

Total sales grew by £176m to reach £12.4bn, while total revenue increased 2% to £10.8bn. 

Sales at John Lewis decreased 4% to £4.8bn with weaker sales in home and technology, but sales across fashion and beauty were up on the year as the retailer attracted a “record” 13.4 million customers.

Trading operating profit at John Lewis reached £639m, up by £13m year on year.

Sales at Waitrose grew 5% to £7.7bn and trading operating profit improved by £170m to £1.06bn.

The grocer has now delivered “eight consecutive quarters of growth in customer numbers” as shopper numbers increased 8.1% to 15 million.

In terms of outlook, the retailer expects to see continued improvement in “key financial performance measures”.

It will also invest £542m in support of its “refreshed plan” that will focus on modernising technology, refreshing shops and “simplifying how we work”.

John Lewis Partnership chair Dame Sharon White said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.

“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and our partners’ commitment to delivering excellent customer service.

“This year 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.”

Chief executive Nish Kankiwala added: “I’m grateful for the hard work and dedication of our partners in delivering our return to profit while growing our customer numbers, accelerating the pace of transformation and driving significant improvements in productivity.

“It’s great to see an increasing number of customers embrace our partner-led service and our unique credentials for quality and value, while we deliver exciting new innovations in both Waitrose and John Lewis. 

“I’m very confident in the next phase of our refreshed plan, which will focus on delighting our retail customers, offering excellent service delivered by our partners.”