The group, which owns the John Lewis, Waitrose and Peter Jones brands, reported figures for the full year to 29 January.
Operating profits at John Lewis department store rose 22.2% to £201.2m
Operating profits at the group's grocer, Waitrose, also increased, but at a slower rate, up 3% to £274.9m.
Charlie Mayfield, chairman of John Lewis Partnership, said part of the success was down to investing in the brand, and in digital.
He said: "We have renewed our commitment in both Waitrose and John Lewis to improving the value we offer to customers, and broader ranges and innovative marketing have attracted more customers and boosted our market share.
"The partnership has clearly established itself as a leader in multichannel retailing. Our investment over many years in JL.com and our growing presence in Waitrose Deliver, together with our supply relationship with Ocado, have brought our offer to more people in more parts of the country and these initiatives have been at the forefront of our growth and innovation."
Mayfield pointed to new shop formats, such as "John Lewis at home" and Waitrose convenience, which he claimed had already witnessed encouraging results.
Gross sales across the business were £8.21bn, an increase of £784.8m (10.6%) compared to the year before.
The John Lewis Partnership is owned by its employees, and bonuses for partners were set at 18% – an average of nine weeks' pay.
Gemma Lovelock, UK managing director at TLC Marketing Worldwide, which specialises in retail, said the trade-up to a more premium Christmas had extended into 2011 as consumers cut back elsewhere.
She said: "People are going out less, but are spending more on food and entertaining at home. And as a choice venue for quality groceries, perhaps the choice venue, Waitrose has naturally benefited. The strong rise in the average weekly number of customers underlines this.
"The typical Waitrose shopper will also be more secure financially in the current climate, so demand is proving more resilient at the higher end."
Waitrose began to sell Fairtrade condoms to tie into Fairtrade Fortnight this month, and has pushed its sustainable credentials with ads showcasing its sustainably caught cod.
This article was first published on marketingmagazine.co.uk