Grocery price war pushes Waitrose profits down 24%

Waitrose is competing against other supermarkets on price

Waitrose has posted a 24.4% drop in operating profit for 2014 as competition for market share in the UK grocery market continues to hit supermarkets' bottom lines.

The UK's sixth largest supermarket reported posted a 4.7% revenue increase on the previous year but lower prices eroded the retailer's margins.

John Lewis, which is owned by the same partnership, fared better.

It posted a 10.4% rise in operating profit to £442.3m in 2014.

"We expect the returns for the grocery sector to be materially lower for a period of time," said Charlie Mayfield, chairman of John Lewis Partnership.

Waitrose's share of the grocery market rose to 5.2% from 5% a year earlier, according to Kantar data.

Waitrose attracted 400,000 more customers a week in 2014, the 150-year old group said in a statement.

"For John Lewis, the outlook is robust," said Mr Mayfield.

The department stores reported a rise in fashion, home and electrical sales. John Lewis's busiest day was so-called Black Friday, traditionally a day in November when US stores engage in heavy promotion but which has now become a part of the UK retail landscape.

John Lewis's Click & Collect online goods reservations service overtook home deliveries for the first time in 2014.

John Lewis opened small convenience-focused shops at London St Pancras station and Terminal 2 at Heathrow airport.

John Lewis Partnership's 90,000 staff will receive a bonus worth 11% of salary this year, down from 15% last year.