Waitrose grew sales to £4.3bn while investing heavily in loyalty, pricing and own brand, prioritising long-term growth over short-term profit.
Investing for long-term loyalty, not short-term profit
John Lewis Partnership released its half-year results for the 26 weeks ending 1 August 2026, revealing the performance of both Waitrose and John Lewis in that period. The standout result was from Waitrose, recording a sales result of £4.3bn, representing a growth of 4% year-on-year. This is an encouraging performance ahead of last year’s sales in the same period of £4.1bn, but operating profit fell by £7m to £103m, with operating margin also dropping from 2.8% to 2.6%.
The retailer attributes this decline in operating profit to three key factors. One was external, with summer heatwaves increasing the cost of refrigeration and putting pressure on cold supply chains. The remaining factors reflect deliberate strategic decisions aimed at long-term growth rather than simple short-term profitability. During the period, Waitrose invested £20m into permanently lowering prices on selected products, while also increasing investments into its loyalty scheme.
Both initiatives appear to be delivering positive outcomes. The retailer has reported a 20-point increase in its Net Promoter Score for its loyalty offering, suggesting stronger customer engagement and improved long-term customer value. Meanwhile, continued price investment supports Waitrose’s efforts to strengthen value perception and drive larger baskets over time.
These investments mirror broader trends across UK grocery. Retailers have continued to invest heavily in pricing and loyalty throughout 2026 as competition for shopper remains intense. Waitrose’s main rival M&S have continued to expand its three value ranges, with specific focus on its Remarksable Value range, while also overhauling its Sparks loyalty scheme in an effort to increase customer engagement and broaden its userbase. As a result, Waitrose’s strategy appears aligned with wider industry priorities, even if it creates near-term pressure on profitability.
Premium private label continues to defy cost pressures
Private label remains one of the most important battlegrounds in UK grocery, allowing retailers to appeal to multiple shopper demographics while also differentiating their offer from competitors. As a result, investment into own-brand development continues across the market.
Waitrose reported the launch of more than 540 new private label products during the first half of 2026, highlighting the scale of its investment in innovation. However, the strongest performance came from its premium No.1 range, which saw a sales growth of 15% during the period.
The result is particularly noteworthy given ongoing pressure on household budgets. While shoppers remain conscious of spending, the performance of No.1 suggests they are willing to trade up in certain categories where they can see better quality, more differentiation, or an affordable alternative to premium branded products.
This trend extends across the UK grocery market. Premium private label ranges have become increasingly important growth drivers for retailers, offering shoppers a balance between quality and value. Earlier this year, Sainsbury’s announced its Taste the Difference range had surpassed £2bn in total sales, further highlighting the continued strength of premium private label seemingly regardless of economic uncertainty. For Waitrose, the combination of significant private label innovation and strong No.1 performance reinforces the retailer’s ability to compete through proposition as well as price.
Online growth creates opportunity and competition
Waitrose also reported online sales growth of 11% during the first half. Given the retailer’s typical shopper base is toward the affluent end, this performance is unsurprising. These shoppers are often more willing and able to afford the added costs of shopping online and delivery, all in exchange for the improvement in convenience and flexibility.
The results reinforce how online channels can complement physical stores rather than simply cannibalise them. Shoppers increasingly move between channels depending on mission, occasion and convenience needs, making an integrated omnichannel proposition increasingly important.
However, competition within online grocery continues to intensify. Major retailers are expanding both their digital capabilities and their partnerships with delivery aggregators. Tesco recently partnered with Uber Eats and Deliveroo, followed up by the rollout of Clubcard pricing and rewards on Uber Eats’ platform. While Waitrose already partners with Uber Eats, Deliveroo, and Just Eat, greater competition on these platforms could create additional pressures as retailers compete for visibility, convenience and loyalty.
Modernising stores while building future capacity
Beyond pricing and loyalty investments, Waitrose has continued to invest in its physical operations. During the first half, the retailer refurbished 15 stores, and opened some others. These refurbishments served to modernise the existing estate. Early indications suggest stronger sales and customer satisfaction in upgraded locations.
Store investment remains critical for maintaining Waitrose’s premium positioning, particularly as customers increasingly expect modern layouts, improved navigation and a seamless shopping experience. The rollout of ESLs across 225 stores further reflects the commitment to efficiency and modernisation.
Waitrose is also investing in its future growth. The acquisition of new sites for stores and development of a new distribution centre in Avonmouth reflects a focus on strengthening both its store network and supply chain capabilities. The new facility is expected to support more than 50 stores from early 2027.
However, when compared with the pace of investment from key rival M&S, Waitrose appears to be taking a more measured approach. M&S has continued investments into store renewals and new openings across its estate, making investments designed to support its ambition of growing its food business. While the long-term effectiveness of these investments remains to be seen, Waitrose find themselves playing catch-up in the race to modernise store footprints.
Waitrose remains the engine of the Partnership
The results reinforce the importance of Waitrose within the John Lewis Partnership. The supermarket accounted for approximately 68% of total Partnership sales in the period, highlighting its role as the group’s primary growth driver.
The contrast between Waitrose and John Lewis was particularly noticeable. Waitrose continued to grow sales and generate profit, John Lewis however reported declining sales and a larger operating loss as its transformation programme continues.
Management has remained cautious regarding the economic and geopolitical backdrop heading into the second half of the year. However, with the majority of profits traditionally generated during this period, the Partnership remains confident in its preparations for peak trading.
Ultimately, the results paint the picture of a retailer willing to accept modest profit pressure today in order to strengthen loyalty, improve value perception, and build long-term growth. In an increasingly competitive grocery market, those investments may prove more valuable than short-term margin gains.
