Waitrose, the supermarket arm of the John Lewis partnership (JLP), has scrapped plans to open new stores, opting to revamp existing ones with wine bars and bakeries instead.
Rob Collins, managing director at Waitrose, said the group has halted plans to open seven new supermarkets. The decision resulted in a £25m charge that pushed John Lewis’s profits for the six months to July down nearly 75 per cent to £56.9m.
The British upmarket grocer plans to focus on existing shops instead.
“We are shifting the focus of our investment towards our existing branches meaning that the rate we open new shops will slow down,” a spokeswoman for Waitrose told The Independent.
“Our hospitality business has generated strong growth and will play a big part in our branch programme going forward,” she added.
Waitrose “hospitality” sales from more than 200 in-store cafes, bakeries, wine and juice bars rose 7.1 per cent in the first half of the financial year.
As a result new plans for London include introducing more outlets with wine bars and juice bars, popular with Waitrose’s middle class clientele and similar to the supermarket’s branch in King’s Cross.
“We plan to increase both the depth and pace of investment in our existing stores,” Sir Charlie Mayfield, chairman of JLP, said.
“This will enable us to get the best value from our estate,” he added.
The plans were announced as the John Lewis Partnership posted a 14.7 fall in pre-tax profit to £81.9m, excluding exceptional charges.
Sir Charlie said the fall reflects “market conditions” and “steps we are taking to adapt the Partnership for the future”.
He added the result of the EU referendum in June had no impact on its sales so far.
Andy Street, John Lewis managing director, previously said the depreciation of sterling versus the US dollar in the wake of Britain’s vote to leave the EU could potentially become a major issue for the company.
Additional reporting by Reuters
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