How healthy is the Waitrose Mark Price leaves behind?

Waitrose’s full year results were portrayed by Mark Price and John Lewis chairman Sir Charlie Mayfield as pretty good reading considering the continued difficult trading environment of deflation and fierce retail competition they had faced over the last 12 months.

Like-for-like sales fell by 1.3% but the retailer held its own in other ways with market share up by 0.1% to 5.5%, customer numbers grown, and 220,000 more transactions a week compared to 2014-15 with direct sales from websites increasing by 21%.

The myWaitrose card has now notched up 6m users while Pick Your Own Offers is flying with 1.1m customers, both schemes growing by around 20,000 signings a week.

Operating profits were down by 0.8% on a 52 week basis but, after taking out property impacts, were up 3.9%. Likewise, gross sales ended the year up 1.1% over 52 weeks.

So, taking out the dip in like-for-like sales, Price and Mayfield could justify their smiles as the partnership prepared to say its goodbyes to Price, now Lord Price, whose next job is as a trade minister for the government.

The industry will be eagerly watching to see what happens next at Waitrose as retail director Rob Collins steps up to the plate.

Deflation, evaluated by Price and Mayfield at 2.6% over the last year, is not changing direction; more and more of us are eating out more often; we want to be able to buy our food ever more quickly and conveniently; and, lurking beneath everything the retailers do, is the ominous shadow that is Amazon.

The very mention of Amazon, one of the biggest single unknowns in the food industry, was the only time that Price lost a slight shine from his convivial smile as he delivered the annual results to the press in London yesterday.

Yes, Amazon was a worry he conceded: “Waitrose is well set up to invest pretty heavily in technology and service and is set to compete. But if Amazon has £5bn to throw at the market they are going to be a threat to everyone.”

Resiliently, Price reiterated the partnership and Waitrose’s philosophy that it could and would maintain its edge with great products and great innovations.

Collins, too, expressed his belief that Waitrose hospitality, where sales grew last year by a healthy 20% through fancy wine bars, juice bars, eat-in bakeries, cafes and fresh sushi bars, would be an “important plank” in its future store success.

“People who are really knowledgeable and really well trained in areas like wines and cheeses is a very important area for Waitrose and is an area I am very committed to,” he said.

It’s a bold strategy and no one will want to see Collins’ faith misplaced; his abilities are highly praised by Price who wants his Waitrose legacy in safe hands.

But only time will tell whether both are right and if the retailer can continue to hold its own. If like-for-likes continue to head south it will be fascinating to see if Collins will be able to hold his nerve and not go chasing volume at the expense of profits.