Waitrose has reported a 3.9% rise in operating profit for the year, to £232.6m, despite “exceptionally tough” market conditions.

(The figure was adjusted to exclude the previous year’s extra trading week and property profits.)

On the same 52-week basis, gross sales were up 1.1% to £6.46bn, but online sales were down 2.9%. The company blamed this on a strong promotion-driven performance in H1, and said online sales had shown 8.3% growth in H2.

Parent company, John Lewis, said Waitrose was combatting the increase in customers shopping online by providing new reasons to visits its stores, including a foodservice offering. It now has 66 eat-in bakeries and 117 cafés, and saw hospitality sales rise 20% last year.

Now exporting to 58 countries, the company saw sales growth in a number of these including a 47% rise in Bermuda and 70% in Malta.

Sir Charlie Mayfield, chairman of John Lewis Partnership, said: “Market conditions were challenging through the year, with deflation in grocery of -2.6%, and subdued demand in non-food. Quality, value and product innovation were therefore all the more important, alongside greater convenience and service. Our partners performed well on all those fronts, and did so while controlling costs tightly and increasing margin.

“As a result, Waitrose gained market share and grew profits. We attracted more customers while rewarding the loyalty of existing customers through hugely popular initiatives like myWaitrose, which now has six million members.”

The company opened 12 branches in the year, including 10 supermarkets and two Little Waitrose stores. The figures included two relocations and one acquisition, and were offset by the closure of two convenience outlets. The closure of another convenience store in Tottenham Court Road is also planned.