John Lewis Partnership pre-tax profits have tumbled in the first half as it is hit by the crisis in consumer confidence and the stalling retail and housing market.
Pre-tax profits at the group crashed in the half-year to July 26, down 26.6 per cent to£107.3 million. Total sales rose 3.6 per cent to£3.27 billion during the period.
Operating profits at its department store chain John Lewis fell 34.4 per cent to£40 million. John Lewis, regarded as a retail bellwether, reported sales up 0.5 per cent to£1.24 billion. Like-for-likes slumped 1 per cent.
Grocery arm Waitrose revealed sales had increased 5.5 per cent to£2.03 billion, with a like-for-like increase in food sales of 2.5 per cent.
Underlying operating profit, excluding property profit, was£100 million, down 3.2 per cent. Operating profit was down 8.4 per cent to£102.7 million.
John Lewis Partnership chairman Charlie Mayfield said: “Our first half performance reflects the challenging trading environment, our response to those conditions, a particularly strong performance in the first half of last year and our continued investment in growing and developing our business.
“The outlook for the coming six months and next year remains challenging. However, the John Lewis and Waitrose product and service offers are well differentiated, our partners are highly committed and, with our long-term approach to our business, we are well-positioned to take advantage of the recovery in confidence when it comes.”
In the six weeks since the end of the first half, John Lewis Partnership sales rose 2.5 per cent on last year. Waitrose sales have risen 2.4 per cent and 1.1 per cent on a like-for-like basis.
At John Lewis, sales at the end of week six are up 2.7 per cent on last year and 0.4 per cent like-for-like.
Mayfield said that John Lewis Partnership has driven sales by pushing categories, including fashion, at John Lewis and by launching ranges at Waitrose. He added that it had maintained market share.
However, John Lewis was hit by housing market woes with a 5 per cent slump in sales of its home offer. Fashion sales rose 5 per cent and sales of electricals increased 1 per cent. John Lewis Direct sales were up 30 per cent.
Savings of£25 million have been achieved during the period, added Mayfield.
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