John Lewis records £99m loss

John Lewis has announced a pre-tax loss of £99 million for the first six months of the year.

The department store recorded a profit of £69 million during the same period of 2021.

The retailer said that it is not unusual for it to make a loss in the first half of the year because its trading is heavily skewed to Christmas, with most of its profits accumulated in the final quarter.

But the most recent loss is significantly higher than the £52 million recorded pre-pandemic.

John Lewis explained that this year's loss was largely driven by inflation, which has impacted consumer spending, as well as changing consumer habits post-pandemic.

While the company has gained more customers across the partnership over the past six months, up four per cent at John Lewis and up six per cent at Waitrose, they are spending less.

Waitrose sales reached £3.6 billion in the first half, down five per cent compared to the same period of last year. During the pandemic, the grocery brand saw bigger baskets as customers were restricted by covid - meaning less eating out and grocery shops.

John Lewis said that inflation has also increased its costs, forcing it to do more to meet efficiency targets as it hasn't passed on all of these costs to customers.

“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,” said Sharon White, John Lewis partner and chairman. “As a business, we have faced unprecedented cost inflation across grocery and general merchandise.”

The business has seen in-store spending rebound compared to last year, which has helped drive the three per cent increase in sales at John Lewis, up to £2.1 billion.

While the organisation says that the shift to online will be permenant, it has seen customers moving their discretionary spending from high margin, big ticket household items to "restaurants and holidays - from dining room furniture to dining out".

John Lewis said that while the outlook is "uniquely uncertain" it thinks it is well placed to navigate ongoing inflationary headwinds.

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