John Lewis continued to outperform the market in year ended 31st January 2015 with gross sales up 9.2% to £4.43b (7.5% on a 52 week basis), beating the BRC by 4.9%, combined with growth in operating profit, up 10.8% to £250.5m (10.4% on a 52 week basis).
Every channel and category grew during the year. On a 52 week basis, shop sales were up 2.2% with LFL shop sales growth at 0.6%, while johnlewis.com saw an increase of 21.6% to £1.4b.
John Lewis saw the significance of new ways to shop and changing customer expectations in two key shifts in consumer behaviour. First, Click & Collect overtook home deliveries in 2014, now accounting for 54% of online orders; and secondly, a new shape of peak trade was firmly established with Black Friday marking the busiest single day. The business' distribution and online operations stood up well to the challenges and allowed it to deliver on a 'logistics Christmas'.
On a 52 week basis, Home was up 7.2% with furniture the highlight at 12.8%, floorcovering up 6.1% and the House range continuing to grow at 24.2%. John Lewis also signed up to WWF's Forest Campaign, joining other retailers in a collaborative effort to support responsible forest trade.
In its physical estate, John Lewis opened two convenience-driven shop formats at London's St Pancras station and Heathrow Terminal 2, and its new flexible format shop in York has seen trade exceed expectations. In existing shops, John Lewis further enhanced the in-store customer experience by opening Opticians and expanding its third party catering offer, and completed a major refurbishment of the Southampton store, which now includes a Little Waitrose within the branch.
While omnichannel capability and innovation remain at the heart of John Lewis' success, logistics came to the forefront in driving differentiation and delivering to changing customer expectations. 2014 saw the business invest £92.5m in its IT and systems, providing the foundations of a fully joined-up customer experience across the customer journey. Work continued on John Lewis' second distribution centre in Magna Park, which takes the business to over 1.3m sq ft of space when combined with the existing Magna Park site, and the retailer has also announced the opening of a third distribution centre in Milton Keynes in 2016.
In John Lewis' 150th anniversary year, it took time to mark the history of the business at a one-off celebratory event for Partners from across the UK, as well as creating a range of innovative products through brand and designer collaborations. The 150th anniversary year saw the business raise over £0.6m through its charity partnership with Barnardo's.
The pace of change looks set to continue in 2015, with the strongest retailers combining bricks and clicks to create the customer service levels and convenience that customers want. This year, John Lewis will open its regional flagship shop in Birmingham, setting a new benchmark in bricks and mortar retailing.
