Waitrose operating profit slumps but market share grows

Waitrose
Waitrose: operating profits slump but market share grows
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High-end supermarket Waitrose has posted a 9.4% drop in operating profit in its half-year results to 26 July as the fierce competition battles on. 

While the supermarket increased its market share to 5%, the figure is dwarfed by gains made by discounters Aldi and Lidl which are respectively up 1.1 and 0.5 percentage points to 4.8% and 3.6% of market share [Kantar Worldpanel]. 

Waitrose total online services gross sales were posted as £161m with online grocery gross sales up 54%.
The hit on operating profit has been attributed to “substantial levels of investment across the business and the market sales slow down”.

In the analysed period, 15 new branches were opened, which is 11 more than the same period last year. In good news, the supermarket boasted 670,000 more weekly customer transactions and membership of the myWaitrose scheme rose to 4.6 million.

Investment

Sir Charlie Mayfield, chairman of John Lewis Partnership, said: “Profit before tax and exceptional item, of £129.8m, is 12% ahead of last year, benefiting from property profits of £11m. Operating profits in John Lewis rose by 62% (£22m), offset by a decline in Waitrose operating profits of 9% (£15m).

"In Waitrose, profits were lower as a result of a much higher level of investment in new branches and accelerating the growth of the business through investment in Waitrose.com and the myWaitrose programme, as well as the challenging market conditions.

"However, Waitrose sales performance continued to be well ahead of the market.
“Our first half performance has been hard won. The outlook in the grocery sector remains challenging and we expect that to continue to be the case for some time.”

The first six weeks of the second half have been “encouraging” with partnership gross sales up 7.5% and Waitrose gross sales up 5.2% (0.9% like-for-like excluding petrol).

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