John Lewis Christmas sales soar but margins suffer

The department store recorded a 3.6% boost in sales year-on-year to £1bn in the six weeks to December 30 strengthened by a 3.1% spike in like-for-likes.

The retail stalwart said its festive sales “significantly outperformed” the market by 4.5%.

Sister retailer Waitrose’s sales during the period lifted 1.4% to £928m, up 1.5% on a like-for-like basis, while sales across the partnership rose 2.5% overall to £1.9bn.

Although Christmas trading was strong across John Lewis and Waitrose, chairman Sir Charlie Mayfield warned that “the pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices, despite higher costs mainly due to the weaker exchange rate.”

“This will negatively affect full-year financial results as indicated previously,” he added.

John Lewis’ festive sales jump was driven by Black Friday which, with sales up 7.2% year-on-year, was the “most successful sales day in its history”.

The department store stalwart’s fashion and electricals and home technology sales were up 4.9% and 5% during the festive period respectively, although home sales slipped 0.3% as “customers were more cautious about bigger purchases.”

Across the partnership

Stablemate Waitrose’s ecommerce arm registered “the biggest week of sales in its history” during the period, as well as driving in-store sales with the launch of 500 new festive products.

The upmarket grocer’s premium range delivered a 4.2% increase in sales by volume, and its Heston Citrus Sherbert Lazy Gin sold a month’s worth of stock in one day.

John Lewis Partnership said its staff bonus would be decided in March to coincide with its full-year results.

“Looking ahead to 2018/19 we expect trading to be volatile due to the economic environment and anticipate that competitive intensity will continue, driven by structural changes taking place in the retailer industry,” said Mayfield.

“We are well placed to continue building the strength of our two leading brands through these changes and will maintain our current investment plans. Our focus continues to be offering our customers the best range of products and the best value, supported by a market leading service.”