Profits at John Lewis Partnership have more than halved in the past six months as the group behind the department store chain and Waitrose has been hit by costs associated with overhauling the business and weakened customer demand from inflationary pressures and political uncertainty.
Pre-tax profits tumbled by 53.3pc to £26.6m during the six months to 29 July after it had to absorb £56.4m of costs from making a number of redundancies related to restructuring staff roles at Waitrose and John Lewis as it adapts to changing shopping behaviours.
At John Lewis, total sales grew by 2.3pc, helped by the launch of its new exclusive brand AND/OR, while like-for-like sales edged 0.1pc higher. Operating profits before the exceptional items jumped by 38.7pc to £50.2m.
Meanwhile, at Waitrose, total sales grew by 2.3pc to £3.2bn while like-for-like sales inched 0.7pc higher. Waitrose’s operating profits before exceptional items fell by 17.4pc to £100.8m after the upmarket grocer absorbed the higher costs associated with the weaker pound, rather than passing it on to customers in the ongoing intensely competitive supermarket price war.
Sir Charlie Mayfield, chairman, said: “As we anticipated in our full year results in March, the first half of the year has seen inflationary pressures driven by exchange rates and political uncertainty. These have dampened consumer demand, especially in categories connected to the housing market.”