Spending on expansion and on promotions has offset rising sales at UK retailer Waitrose and led to a 5% fall in annual profits.
The company generated an operating profit of GBP260.6m (US$409.5m) in the year to 28 January, down 5.2% on a year earlier.
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Waitrose said investment in “future growth, including immature space and new formats” had “held back” profits.
However, Charlie Mayfield, chairman of Waitrose owner John Lewis Partnership, said the grocer had run “harder-hitting promotions” last year.
Sales excluding VAT were up 7.9% at GBP5.07bn. Like-for-like food sales, excluding VAT and the contribution of 29 new stores, increased 3%.
Mayfield said Waitrose sales had increased by 8.9% in the first five weeks of its new financial year, with like-for-like sales up 2.2%.
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By GlobalData“Current trading conditions are still difficult and consumer confidence remains subdued. Despite that we are continuing to grow faster than the market,” he said. “The Queen’s Diamond Jubilee and the London 2012 Olympic and Paralympic Games will provide a lift for consumers and I am cautiously optimistic that trading conditions may improve later this year.”
