John Lewis Partnership swings to H1 loss as shoppers reign in spending

The John Lewis Partnership swung to a loss in the first half of the year amid the cost of living crisis.

In the six months to July 30, the employee-owned company made a loss before tax and exceptional items of 92 million pounds compared to a profit of 69 million pounds a year earlier.

Chair Sharon White said the loss was largely due to two main factors: The first is that while Waitrose and John Lewis each had more consumers in the first half year-over-year - 6 percent and 4 percent more, respectively - those customers were buying less amid rising inflation.

The second factor is that post-pandemic customer trends have changed, with shoppers moving their discretionary spending from high margin, big ticket household items to restaurants and holidays, and from dining room furniture to dining out.

White also noted: “It is not unusual for us to make a loss in the first half of the year - we have done so in three of the last four half years. Our trading is heavily skewed to Christmas with most of our profits coming in the last quarter of the year.”

John Lewis H1 sales top 2 billion pounds

Sales at John Lewis came in at 2.1 billion pounds in the first half of the year, up 3 percent from the previous year and up 4 percent compared to three years ago, prior to the pandemic.

Fashion has been John Lewis’ best performing category, up 25 percent compared to last year with a particularly strong performance in holiday wear as Brits returned to travelling following the end of lockdown restrictions.

Sales of John Lewis’ value own-brand Anyday increased 28 percent year-over-year as shoppers tightened their purse strings amid soaring inflation.

On the opposite side of the scale, John Lewis’ home and technology categories, which had performed well during the pandemic as people stayed home, declined year-on-year.

Meanwhile, Waitrose sales came in at 3.6 billion pounds, down 5 percent year-over-year and up 4 percent year-over-three-years.

Looking ahead, The John Lewis Partnership said a successful Christmas “is key for the business given the first half”.

It said it will need “a substantial strengthening of performance, beyond what we usually achieve in the second half, to generate sufficient profit to share a Partnership Bonus with Partners”.