Profits have sunk at John Lewis for the six months to July amid what the partnership called “far-reaching” changes in the retail market.
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It compares to a period past year when the Partnership made a one-off gain of £128m from a profit sale.
It’s because of ‘deep structural changes in the retail market, ‘ they said.
John Lewis chairman Sir Charlie Mayfield said first-half profits were always lower and often more volatile than the second half of the year, which usually accounts for at least two-thirds of the annual total.
He added that the changes in market conditions it faced were not as a outcome of the European Union referendum, which he said “had little quantifiable impact on sales so far”.
“Our commitment to competitive pricing, excellent service, increasing pay and investing for the long term have held back profits”, Sir Charlie said.
Waitrose’s premium offering has helped it gain market share as other British supermarkets have lost out to the rise of discounters Aldi and Lidl, which has pushed prices down across the sector.
Operating profits for John Lewis stores fell 31.2% to £32.4m and slid 28.9% to £96.3m for Waitrose. For the first six weeks of the second half from August 1, Waitrose gross sales rose a like-for-like 1.4 percent.
As Britain’s leading department store business seeks to keep pace with online rivals such as Amazon (AMZN.O), John Lewis said investment in technology and distribution now represented 55 percent of total capital spending, up from 48 percent past year.
Although like-for-like sales at Waitrose fell one per cent, the figure rose 3.1 per cent at its department stores.
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It is the UK’s biggest employee-owned business, with all its 89,000 staff being partners.
