E Point Perfect – Interesting and beneficial content

John Lewis posts £99m loss


John Lewis
// John Lewis sales rise thanks to a return to shops but Waitrose sales drop as cost-of-living crisis affects shopper decisions
// In response to inflation, John Lewis will offer colleagues free food over the 14 weeks of winter

John Lewis Partnership has incurred a colossal £99 million loss in its half-year results as the cost-of-living crisis and unwinding of Covid shopping patterns leaves a dent in trading.

At the group’s department chain John Lewis, sales were at £2.1 billion in the 26 weeks to 30 July, up 3% like-for-like on last year – driven by a return to shops.

Operating profit at John Lewis has been maintained at £295 million compared to last year.

Subscribe to Retail Gazette for free

Sign up here to get the latest news straight into your inbox each morning

Fashion has been the best performing category, growing 25% compared to last year with strong performance in holiday wear.

Meanwhile, the group’s value own brand Anyday saw sales rise 28% on last half year after customers had growing concerns about inflation.

The department store chain recorded a 4% year-on-year rise in total customer numbers to 12.2 million over the period.

In response to the inflation crisis, John Lewis will offer its colleagues free food over the 14 weeks of winter, as well as a one-off cost-of-living support payment of £500 for full-time Partners.

John Lewis said its Partners are “the lifeblood of the business” – not just employees but owners and the group has doubled (to £800,000) financial assistance for those facing hardship.

“We are making an active choice to spend £45 million to help our Partners, in addition to the April 2022 pay increase and bonus,” John Lewis said.

John Lewis is increasing the entry level pay for Partners by 4%, costing £10 million in the second half.

The company ensured it has a strong balance sheet with £1.5 billion of cash and credit facilities to help weather further shocks.

Meanwhile, upmarket grocer Waitrose recorded a 5% drop in like-for-like sales to £3.6 billion.

During the pandemic, Waitrose benefited from bigger baskets as customers were restricted by the pandemic, dining out less and doing fewer shops.

However, basket sizes are smaller by nearly a fifth as inflationary pressures continue to affect customers’ shopping decisions.

Waitrose’s operating profit fell by £93 million to £432 million due to a combination of volume decline and inflationary pressures being partially offset by a more favourable profit mix and cost savings.

“No one could have predicted the scale of the cost of living crisis that has materialised, with energy prices and inflation rising ahead of anyone’s expectations. As a business, we have faced unprecedented cost inflation across grocery and general merchandise,” John Lewis said.

“We are responding to the cost of living crisis by supporting those who need it and by stepping up our efficiency programme. We are forgoing profit by making choices based on the sort of business we are, led by our Purpose – ‘Working in Partnership for a happier world’ – by helping our Partners, customers, communities and suppliers.”


Source link >

Related posts

Ted Baker store sales jump 20%, boosted by high street recovery

Laura Ashley signs new partnership with Mamas & Papas

The Fragrance Shop to open more than 100 stores over the next three years

Asos hires new sportswear and outdoor director

Shrinkflation: is the tactic a necessary evil as suppliers battle to keep costs low?

Inflation at “historically high levels”