Press releases

John Lewis Partnership plc Results for the year ended 26 January 2013

Unaudited results for the year to 26 January 2013
[This does not constitute a preliminary announcement]
Strict Stock Exchange Embargo 9.30am

Thursday 7 March 2013

'Long term investment drives strong performance'


Financial Highlights


The John Lewis Partnership

  • Gross sales of £9.54bn, up £811.8m, 9.3%
  • Revenue of £8.47bn, up £706.9m, 9.1%
  • Group operating profit of £452.4m up £59.1m, 15.0%
  • Profit before Partnership bonus and tax of £409.6m, up £55.8m, 15.8%
  • Partnership Bonus of £210.8m; 17% of salary (equal to nearly 9 weeks' pay)
  • Net debt of £371.9m, down £205.4m (35.6%)


  • Gross sales of £5.76bn, up £363.5m, 6.7%
  • Like-for-like sales (excluding petrol) up 3.4%
  • Revenue of £5.42bn, up £343.8m, 6.8%
  • Operating profit of £292.3m, up £31.7m, 12.2%

John Lewis

  • Gross sales of £3.78bn, up £448.3m, 13.5%
  • Like-for-like sales up 10.5%
  • Revenue of £3.05bn, up £363.1m, 13.5%
  • gross sales of £959m, up £278m, 40.8%
  • Operating profit of £216.7m, up £58.8m, 37.2%


Operational Highlights



  • 19 new branches opened (11 supermarkets and eight convenience shops)
  • Selling space increased by 5.2%
  • 4,700 new and improved products launched
  • Online sales grew by 49%

John Lewis

  • Four new shops (one new format shop and three 'John Lewis at home' shops)
  • Strong growth of
  • Click & collect in all John Lewis shops and 193 Waitrose shops
  • Significant market share gains in each of our three main categories

Partnership Highlights

  • Net 3,800 new jobs created
  • Invested £551m in benefits to our Partners, including Partnership Bonus, pensions, Partner discount, catering subsidy, long service leave, leisure spending and the running of our five holiday centres
  • £125m one-off additional cash contribution in January 2013 to final salary pension scheme


Charlie Mayfield, Chairman of John Lewis Partnership, commented:

'This has been a good year for the Partnership with growth in sales and profit above our expectations. Both Waitrose and John Lewis gained market share for what is now the fourth consecutive year. As a result I am delighted that 84,700 Partners will receive a bonus of 17%, equivalent to nearly 9 weeks' pay.

We were encouraged by the acceleration in the rate of sales growth during the year, particularly in the final quarter. Although the market remains challenging, the Partnership has adapted quickly and successfully and we saw the benefits this year. We have stepped up innovation in new products, there's been a continuing focus on value and sustained and rapid growth online. This resulted in over 1.5 million more customers choosing to shop with Waitrose or John Lewis than last year.

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.'

2013/14 Outlook

Although the market remains subdued we see more stability in customer demand and further opportunities to grow market share in both John Lewis and Waitrose. We have seen a good start to 2013/14. After five weeks, Partnership gross sales are 10.5% higher than last year. Waitrose gross sales have increased by 8.1% (6.4% like-for-like, excluding petrol) and John Lewis gross sales are 16.0% higher than last year (13.7% like-for-like).

We expect our sales growth to continue this year, albeit less strongly than in 2012/13, and we are planning a significant step up in total investment, with a particular focus on our supply chain, technology and systems. These investments are central to our strategy of remaining at the forefront of changes in retail today whilst preparing the Partnership for tomorrow.

Financial Results

In 2012/13 the Partnership traded strongly in a tough market, and achieved robust sales and profit growth. Both Waitrose and John Lewis grew sales well ahead of their respective markets, increasing their market share.

Partnership gross sales (inc VAT) were £9.54bn, an increase of £811.8m, or 9.3%, on last year. 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, and 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, while cash generated from operations grew to £973.9m, an increase of £214.8m, or 28.3%.

These results reflect the collective hard work of our Partners who, as co-owners, will each receive the same percentage of annual pay as a cash bonus.  Partners will share £210.8m in profit, which represents 17% of pay or the equivalent of nearly 9 weeks' pay.


Waitrose's gross sales grew strongly, up 6.7% (£363.5m) to £5.76bn in a slow market.  Like-for-like sales grew by 3.4% with a noticeable acceleration in the second half of the year as the impact of our investment in lower prices kicked in. This also helped to drive volume growth in our like-for-like estate. Operating profit grew by 12.2% to £292.3m.

A sustained investment in lower prices, unwavering commitment to product quality and high standards of customer service have resulted in Waitrose outperforming the industry for the fourth year running with market share up from 4.7% to 4.9%. 

The combination of Brand Price Match (matching Tesco's prices on branded lines excluding promotions), at least 1,000 promotions a week, the expansion of essential Waitrose to 1,800 lines, and sharper own-label prices across the board created an attractive value package, and continued to change consumers' views on Waitrose's price position. Overall, customer transactions grew by 6.1% in the year.

In parallel with lower prices, innovation continued apace and we introduced 4,700 new and improved products, more than ever before in a single year - all with the same commitment to the high standards of quality, sourcing integrity and fairness to suppliers for which Waitrose is known. Particularly successful new lines have been ranges of celebration cakes and desserts and the Heston from Waitrose range of ready meals. Quality and innovation will continue apace with 5,000 new products planned for 2013/14.

Our strategy has anticipated changing shopping patterns and customers now choose to shop across all our formats - full weekly shops in branches and online (including mobile), top-up shopping in Little Waitrose shops, Click & collect purchases from Waitrose and John Lewis picked up in our supermarkets and convenience shops. had a very successful year with online sales growing by 49%, compared to 19% for the online grocery market according to Kantar Worldpanel data. The grocery service is available from 199 branches and from the customer fulfilment centre in Acton, West London which now handles more than 19% of all orders. John Lewis's Click & collect is proving hugely popular and has increased footfall in our Waitrose branches - for example, over the Christmas period our branches handled 300,000 such orders.

Eight Little Waitrose convenience branches and 11 new core shops were opened in the year, which together with one closure, brings the total estate to 290 branches. In addition we carried out major redevelopments on our branches in Putney, Saxmundham and Bath, with Bath doubling in size to 38,000 sq ft. Waitrose is also present in 17 Welcome Break motorway services and on two Shell forecourts.

We now have seven licensed shops in the Middle East, having opened four more during the year.  We now export Waitrose products to more than 30 countries, with new markets in the last year including South Korea, Taiwan, Gibraltar and Trinidad. Export sales rose by 20% in the year.

We plan to open eight core branches, including Helensburgh, our sixth shop in Scotland, and up to 10 Little Waitrose convenience shops, the first of which will open in Vauxhall, London in April. We are also planning a substantial refurbishment programme of our existing shops.

Waitrose will open a new Regional Distribution Centre (RDC) in Leyland, Lancashire, in summer 2013 to support expansion in the north of England and Scotland. Recruitment for the 300 new jobs created is already underway. We have also invested in a new Warehouse Management System which, through increased picking accuracy, is already leading to a significant improvement in availability.

In the year ahead, Waitrose will further invest in customer service with roles for 200 specialists in fresh produce and horticulture.  A further 2,000 Partners will become product advisors in their branches.

John Lewis

John Lewis gross sales grew strongly through the year up 13.5% (£448.3m) to £3.78bn despite a market which continued to be challenging. Total like-for-like sales grew by 10.5%.  Operating profit grew by 37.2% to £216.7m.

Exciting products, knowledgeable customer service and effective marketing, together with our commitment to be Never Knowingly Undersold, all contributed to this success, while the brand was given added impetus by our high profile support for London 2012.

We achieved market share gains in all three of our main categories.  Sales in Fashion increased by 9.1%, driven by a mix of own brand, new brand acquisitions and designer collaborations. Home saw good growth of 6.2% and John Lewis now has the second largest home market share in the UK. Electricals and Home Technology (EHT) grew very strongly up 28.9%, achieving our highest ever market share positions in computers (including tablets), TVs, cameras and both large and small electrical goods, and reflecting the trust customers have in our price-matching position, our Partners' product knowledge and our strong supplier relationships.  In April, John Lewis was voted 'Britain's Favourite Electricals Retailer' by Verdict and also came top in its 'Customer Service' category.

Product innovation, quality and value at all price points were central to success in each category. Brand partnerships in EHT, new designer brands such as Grayers, Seasalt and Allegra Hicks in Fashion as well as inspirational ranges from Nick Monro, Bethan Gray and Tilly Hemingway in Home have set the pace for innovation. In own-brand, we launched highly successful ranges such as our designer collaboration with Alice Temperley and House, a wide selection of home furnishings and accessories.

To make our brand more accessible, we made important steps in giving customers a seamless, 'omni-channel' experience. gross sales were up 41% to £959m and the channel now accounts for over 25% of trade. John Lewis shops gross sales were up 6.4% with like-for-like shop sales up 2.6%. Nearly two thirds of all transactions now involve customers visiting both shops and online channels. 

Click & collect, available in all John Lewis and 193 Waitrose outlets, is a key part of this change in shopping behaviour and is our fastest-growing fulfilment channel. Orders have almost doubled year-on-year, with 43% of purchases collected from Waitrose branches.

We are also strengthening our IT and supply chain infrastructure. Last month we successfully relaunched on a new £40m platform to support our online growth and have announced investment in a new distribution complex to sit alongside our existing operation at Magna Park.

We opened four shops in 2012; three 'at home' branches in Newbury, Chichester and Ipswich and a new format shop in Exeter, providing a full-line assortment in a smaller trading space. This year we will refurbish John Lewis High Wycombe and invest in refurbishments at John Lewis Oxford Street, Kingston and Nottingham. We are planning two new shops in 2014 at York and Birmingham.

Beyond our traditional products and services, John Lewis Insurance has seen good growth in 2012/13. We have also begun a partnership to host Kuoni travel services in our shops, and internationally, we have developed our first collaboration with Shinsegae, a South Korean department store. We will be launching French and German language websites later this year to take advantage of the two most well developed EU e-commerce markets.

Partnership Services, Corporate

Partnership Services, which was established in 2009 as the Partnership's business services division to support John Lewis and Waitrose, made a significant contribution to our efficiency over the year helping to deliver benefits through better procurement of not-for-resale goods and services, and working capital improvements.

The cost of our process operations was held flat with productivity improvements offsetting inflation and growth in like-for-like transactions. The breadth of the processes managed by Partnership Services for both Partners and suppliers continued to increase last year to include more standardised procurement of not-for-resale goods and services, simpler electronic invoicing, more accurate expense management and travel management services for Partners.

The level of investment in a number of significant transformation programmes has increased by over £20m, which is the primary factor behind the year-on-year increase in Corporate costs. These programmes are principally within our Personnel, IT and Partners' Counsellor's functions, and are designed to increase both the efficiency and effectiveness of our support functions, and are central to our move to build a more agile and adaptable organisation. 

Investment in the future

Capital spending in 2012/13 was £376.9m, a decrease of £140.9m (27.2%).  This reduction largely reflects fewer branch openings and lower spend on refurbishments.  We expect capital spending in 2013/14 to return to 2011/12 levels.

Waitrose invested £198.2m, mainly on new branches opening this year together with three extensions, branch refurbishments and investment in the implementation of a new warehouse management system to drive productivity in our supply chain, and also a number of retail systems improvements to aid efficiency and enhance the flexibility of our offer.

John Lewis invested £144.3m, with the mix of investment continuing to reflect the business strategy of opening new space, refurbishing key regional shops and investing in the IT and distribution infrastructure to support omni-channel trading.

In addition, £34.4m was invested centrally, mainly in maintaining and modernising our IT platforms, head office buildings and residential clubs.


Net finance costs on borrowings and investments decreased by £0.3m (0.5%) to £60.0m.  After including the financing elements of pensions and long service leave and non-cash fair value adjustments, net finance costs increased by £3.3m (8.4%) to £42.8m.

At 26 January 2013, net debt was £371.9m, a decrease of £205.4m (35.6%).  During the year we repaid borrowings totalling £242m from available cash. In January 2013 we replaced a number of existing bilateral borrowing facilities with a new £325m five year syndicated facility, which was undrawn at year end. 


The accounting charge for pensions included within operating profit was £138.1m, an increase of £14.1m or 11.4% on the prior year reflecting the change in the financial assumptions and growth in scheme membership.

The total accounting pension deficit at 26 January 2013 was £822.1m, an increase of £184.0m (28.8%). Net of deferred tax the deficit was £652.4m. The accounting valuation of pension fund liabilities increased by £621.0m (19.6%) to £3,796.0m, while pension fund assets increased by £437.0m (17.2%) to £2,973.9m, including a £125m one-off cash contribution made by the Partnership in January 2013.

On the actuarial funding basis used in the last valuation in 2010, we estimate that our defined benefit final salary schemes would have ended the year with a surplus of approximately £280m. The next formal valuation of the schemes will be as at 31 March 2013. Given that gilt yields are indicating lower returns in the future, we anticipate the actuarial funding position will weaken.

The pension is one of the most important benefits offered to Partners, but also accounts for the greatest single investment made each year by the Partnership. During the next year the Partnership will be undertaking a review of the pension scheme to ensure that it can remain fair to Partners and sustainable from a business perspective, and doing so over this time period will allow the opportunity to consult extensively to make sure that the changes are right for both Partners and the Partnership.

Corporate Social Responsibility

Corporate social responsibility (CSR) has always been part of the way we do business. Partners have continued to offer their time to support local, regional and national initiatives that help to build more vibrant, economically sustainable communities aligned with the Partnership's vision to be a force for good in the community.

We recognise that we have a vital role to play when we open new shops, in contributing to the long-term prosperity of the local area, socially and environmentally. When we opened John Lewis Exeter in October 2012, innovations in cooling and lighting enabled us to deliver a 30% reduction in CO2. Our buildings represent 32 out of the top 42 BREEAM (Building Research Establishment Environmental Assessment Method) rated retail buildings. The Partnership is the only retailer to have achieved a BREEAM post-construction outstanding rating. As recognised by the Carbon Trust Standard, the Partnership continues to invest in low carbon distribution and achieved recertification in June 2012 for continued progress in reducing operational carbon emissions.

In Waitrose, we have continued to make progress in sourcing certified sustainable raw materials such as palm oil, timber and fish. For example, Waitrose met its target of using sustainably sourced palm oil in all own-brand products by the end of 2012, and has been commended by the Roundtable on Sustainable Palm Oil (RSPO) as the first UK retailer to use its trademark logo on products that use palm oil in significant quantities.

John Lewis is proud to support British design and quality, demonstrated by its launch of the 'Made in the UK' identifier. During 2012 the number of UK suppliers increased from 132 to 156. John Lewis also committed to educating customers to change behaviour and encourage sustainable living. As part of our commitment we have agreed to a trial with UK government Department of Energy and Climate and Change (DECC) which will provide electrical energy information labelling to show the lifetime energy efficiency of different electrical appliances.

Notes to editors

The John Lewis Partnership - The John Lewis Partnership operates 39 John Lewis shops across the UK (30 department stores and nine John Lewis at home),, 255 Waitrose supermarkets, 35 Waitrose convenience stores, and business to business contracts in the UK and abroad. The business has annual gross sales of over £9.5bn. It is the UK's largest example of worker co-ownership where all 84,700 staff are Partners in the business.

Waitrose - Waitrose, Britain's favourite supermarket*, has 290 shops in the UK and is consistently achieving sales growth significantly ahead of the market**. Its strong performance has been driven by the success of the essential Waitrose range, Brand Price Match, an unmatchable top tier of products and free delivery for online shopping, as well as a long term commitment to sourcing the UK's finest local and regional foods. Waitrose combines the convenience of a supermarket with the expertise and service of a specialist shop - dedicated to offering quality food that has been responsibly sourced combined with high standards of customer service. (

* Which? Annual Supermarket Satisfaction Survey 2013, Favourite Food & Grocery Retailer at Verdict's annual Consumer Satisfaction Awards; Favourite Supermarket at Good Housekeeping Awards
** Kantar World panel

John Lewis - John Lewis, 'Britain's favourite electricals retailer 2012'* and 'Best Multichannel Retailer 2012' **, typically stocks more than 350,000 separate lines in its department stores. The website stocks over 200,000 products focused on the best of fashion, beauty, home and giftware and electrical items including online exclusives. is consistently ranked one of the top online shopping destinations in the UK. ( John Lewis Insurance offers a range of comprehensive insurance products - home, car, wedding and event, travel and pet insurance and life cover - delivering the usual values of expertise, trust and customer service expected from the John Lewis brand.

* Verdict Consumer Satisfaction Index, April 2012
** PayPal etail Awards 2012

Watch the webcasts of the presentation of the unaudited results for the year ended 26 January 2013.

Further information

John Lewis Partnership
Andrew Moys
Director of Communications
Telephone: 07525 272377

Citigate Dewe Rogerson

Simon Rigby / Nicola Swift
Telephone: 020 7638 9571

John Lewis

Helen Dickinson
Director, Communications
Telephone: 07785 952567

Louise Cooper
Senior Manager, Corporate, Digital & Branch PR
Telephone: 07808 574117

Christine Watts
Communications Director
Telephone: 07764 676414

Gill Smith
Senior Manager, Corporate PR
Telephone: 07887 898133