Boss says retailing
Department store and grocery business John Lewis Partnership has warned that there will be no let-up in harsh retail trading conditions this year.

As he posted full-year results, chairman Sir Stuart Hampson warned: 'There's every indication that the year ahead will be a tough one, with the housing market remaining flat and indications of rising unemployment. Retailing in 2006 will not be for the faint-hearted.'

The retailer revealed a 10 per cent rise in group profits to£252 million for the year to January 28. Sales were 8 per cent up to£5.8 billion and performance was boosted by a strong final quarter. A powerful contribution from upmarket food chain Waitrose - which is opening its first stores in Scotland after acquiring five outlets there - helped compensate for a decline in department store profits.

Hampson said: '2005 saw some of the most testing retailing conditions for well over a decade, but out storming performance in the final quarter delivered a strong improvement in sales and profit for the year. We achieved it by winning the trust of our shoppers, building close relationships with our suppliers and focusing on delivering quality, value and a better level of service.'

Profits at John Lewis department stores fell 6 per cent to£192 million, but were 'broadly level on an underlying basis'. Sales rose 2 per cent to£2.4 billion. Direct sales rocketed by 69 per cent to£113 million and the direct arm is now profitable.

Waitrose generated profits 19 per cent ahead to£231 million on sales, 13 per cent up to£3.3 billion.

In the five weeks to March 4, group sales climbed by 8 per cent. Waitrose is ahead by 4 per cent like for like in the new year and John Lewis by 6 per cent.

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