Sales at Waitrose stores jumped 13% last year to £2.1bn, but extra costs look likely to make profits at the chain less impressive. Waitrose announced its preliminary estimate of annual results with like-for-like sales up 3% ­ a trend which continued in the first five weeks of this year, with sales jumping 16%. Managing director David Felwick said extra costs had resulted from opening 11 branches acquired from Somerfield and the investment in internet shopping start up Last Mile Solutions. He said the chain had been "catching its breath" in the last year. But it now had 16% extra selling space, helped by another five extra newly built stores, which would increase profitability considerably. Felwick claimed that Waitrose's strengths of "quality, service and being the best fresh food retailer" had helped attract customers. "Waitrose achieved an advance in its share of this competitive market, and the extra volume enabled margin to hold up well. We will return with real vigour this year." Felwick added: "Our reputation has grown, especially in the organics and wine areas. With people keen to understand product integrity, this has strengthened our brand." Felwick said Waitrose had no intention of changing its marketing strategy ­ sticking to price comparisons on 300-400 lines at a time, which he said reinforced to shoppers that if they bought basic items they would be competitively priced. But he said the chain did intend to do more advertising over the coming year ­ not just in print, but possbily on TV and radio. Felwick also had high hopes for the future of home shopping once WaitroseDirect is rolled out later this year. "We expect to see a big take up ­ it will be a big home shopping force." The chain plans three "substantial extensions" this year at Thame, Birmingham and Crowborough, along with two Food & Home stores at Canary Wharf and Cheltenham and "a crop" of other store openings in 2002, which will be announced later this year. {{NEWS }}

Topics