John Lewis posts £92m loss after ‘unprecedented cost inflation’
John Lewis Partnership has posted a £92m loss before tax, blaming shoppers spending less due to inflationary pressures in the first half of the year.
This was versus a £69m profit compared to the same period last year, although the partnership said on Thursday it was “not unusual for us” to make a loss in the first half of the year.”
“Our trading is heavily skewed to Christmas with most of our profits coming in the last quarter of the year,” the Waitrose and John Lewis owner said in interim results.
The loss was attributed to inflation hammering consumer spending and creating “unprecedented cost inflation” across the business that has not been totally passed on to customers.
After the pandemic, customers have now shifted from spending their spare cash on “high margin, big ticket household items to restaurants and holidays – from dining room furniture to dining out,” John Lewis said.
Chair Sharon White admitted the firm would need “a substantial strengthening of performance,” to generate enough profit for partners to receive a partnership bonus.
Volume decline and inflationary pressures sent supermarket Waitrose’s operating profit down by £93m to £432m, although customer numbers were up on the year before.
John Lewis saw sales rise three per cent to £2.1bn, with a return to office working sending city centre stores’ sales booming.
It noted a rebound in fashion sales, with holiday shopping pushing growth to 25 per cent on the year before.
Stay-at-home categories, home and technology, dipped year-on-year, following the easing of Covid lockdown rules earlier this year.
The retailer also unveiled a one-off cost of living payment of £500 for full-time partners, in addition to offering staff free food over the winter months.