The first half of 2013 has seen John Lewis build on last year's performance to deliver a gross sales increase of 6.6% to £1.71b. Operating profit before restructuring costs was up 9.9% to £50.1m, reflecting the robust sales performance and a strong focus on controlling costs. Restructuring costs in the first half were £15.4m for streamlining its department store management structures and a new distribution infrastructure, both of which demonstrate its commitment to long-term efficiency in a fast-changing sector. Operating profit including these costs was down 23.9% to £34.7m.
John Lewis has significantly outperformed the market with like-for-like sales up 5.1% against the BRC's 1.7%. Sales growth both in shops (+3.4%) and online (+17.1%) reflects its position as one of Britain's leading omni-channel retailers. Its growth was fuelled by market share gains across each of its categories, which was particularly pleasing as last half year benefitted from a number of significant one-off events, including the digital switchover and Jubilee.
In Electricals and Home Technology (EHT), a focus on innovation delivered a record market share of 7.6% and a sales increase of 15.7%. In Home, its strong market position was enhanced with the growth of HOUSE which is now its biggest brand in Home. John Lewis recently launched 'Any Shape, Any Fabric', where customers can choose from over 112,000 upholstery combinations. This key initiative is led by its Lancashire factory, Herbert Parkinson, and further supports the company's commitment to increase sales of UK-made products by 15% by 2015.
johnlewis.com passed the significant milestone of £1bn annual online sales on a rolling 52 week basis - a full year ahead of target. In line with an ambition to stay at the forefront of e-commerce, John Lewis has made a significant investment in a new web platform which went live during the first half. Over 40% of traffic now comes from mobile phones or tablets. In July, it relaunched its transactional mobile app and since then sales via the app have grown quickly, and the company is preparing for what is anticipated to be the UK's first 'mobile Christmas'. With convenience and availability playing a critical role in customer choice, John Lewis announced the opening of a second distribution centre in Milton Keynes as well as a trial to enable customers to pick up purchases in 1,500 Collect Plus locations.
In recognition of the evolving role of shops, John Lewis has focused on creating an increasingly inspirational shopping experience. The first Little Waitrose at John Lewis in Watford opened in June, four more Kuoni travel concessions opening this autumn and upcoming partnerships with hospitality brands are all part of its ambition to redefine the 21st century department store. It is building new shops in Ashford, York and Birmingham, and has announced plans to open in Oxford as well as in Heathrow Terminal 2. Ongoing refurbishment of existing shops continues with the introduction of Beauty and Fashion into a remodelled John Lewis High Wycombe.
John Lewis' efforts were recognised by customers and peers with John Lewis receiving Which?'s Best Retailer, Oracle Retail Week's Retailer of the Year, and Customer Service awards from Verdict and the Institute of Customer Service. In addition, more than 1,000 of its Partners achieved accredited qualifications as part of the 'University of John Lewis'.