Newly published accounts show that Waitrose fell to a massive loss last year as a result of declining sales, a warehouse fire and availability issues.
The accounts, published at Companies House this week, relate to the full-year performance of Waitrose across its operations during the full year 2022. It adds new detail to the financial update provided by the John Lewis Partnership in January, which only outlined performance of the Waitrose brand, and gives new insight into the extent of the struggles at the supermarket chain.
In what was a difficult year pre-tax losses accelerated dramatically to £217.3m in the 12 months to 28 January 2023, down from a £14.7m profit the previous year. It was largely as a result of one-off cost impairments totalling £152m.
The grocer said that implementation of a new merchandising system, as well as a fire at its Brinklow distribution centre near Milton Keynes had affected availability across its network, and increased wastage costs. It had also battled with increased raw material costs.
Other one-off impairments included a one-off cost of living payment, store closures and a central operations review. Inflation had added £67m to its cost base during the year.
Efficiency savings
The company managed to offset around £29m of this loss as a result of its ‘Lean, Simple, Fast’ efficiency savings through supplier negotiations and its programme of job cuts at store management level. The grocer said that many of the issues were “behind us” as it exited the year.
Revenues fell 3.5% to £6.6bn, while like for like sales were down 3.6% during the period. This was despite customer numbers increasing by 7%. The grocer put the fall to customers putting fewer items in their baskets, and switching to lower priced products.
Online sales also slowed down following the boost during the pandemic. They accounted for 14% of sales during the year, which despite being a 27% fall in volume, was higher than pre-pandemic levels, Waitrose said.
Waitrose’s overall market share fell to 4.7% by the end of the year, a fall of 30 basis points.
“Our focus on consistently delighting our customers has seen more of them shopping with us,” a Waitrose spokeswoman told The Grocer. “Our availability is strong, as is the fantastic customer service provided by our Partners, our choice of quality products that have been sourced ethically, and affordable ranges.”
In November the grocer announced it was investing £100m in lower prices across hundreds of products including fresh veg, and staples like tea and butter.
“We’ve known for a while that we’d like to become more affordable, more accessible, but it’s about creating the headroom for that and then thinking long term,” executive director James Bailey told The Grocer at the time, adding that the investment was the first of two to three tranches of cuts planned.
The grocer is also planning to expand its network of convenience stores over the next year after seeing a 32% increase in its food-to-go offering. It includes new partnerships to build outlets in Dobbies Garden Centres and Shell garages.
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