John Lewis reports challenging trading environment
The John Lewis Partnership, which is regarded as a barometer of British retailing, has reported a marginal increase in sales and said trading conditions are “extremely challenging”.
The renowned employee-owned chain, which owns the Waitrose supermarket chain, said sales rose 1% on a like-for-like basis in the six month period to 30 July.
However, across the group, first-half pre-tax profits slumped by 18% to £90.4 million.
The company has bucked the trend when it comes to retail sales over the last few months but today’s figures highlight ongoing concerns about spending as consumers cut back due to high unemployment, rising inflation and spending cuts.
In the meantime, Waitrose said sales were 8.7% higher at £2.6 billion but profits were down 13.8%.
However, it highlighted that 300,000 more customers shopped at Waitrose each week and its market share had risen by 0.2% to 4.1%.
Chairman, Charlie Mayfield, said trading conditions were set to remain challenging for the remainder of the year and into next year.
He comments: “We are not simply waiting for the recovery, but instead we have increased the pace of investment and innovation across the Partnership putting us in the best possible position to seize the opportunity created by a rapidly changing retail environment.”
The figures come shortly after other British retailers have reported tough trading conditions.
Home Retail Group announced a drop in sales at both its Argos and Homebase chains last week, while electrical goods chain Dixons Retail posted a fall in sales.
Many High Street retailers continue to struggle as consumers’ cutback and the British Retail Consortium (BRC) highlighted this in its retail sales report for August.
According to the BRC, like-for-like sales (which exclude the impact of sales at new stores) fell 0.6% last month on an annual basis.
Accountancy firm BDO recently warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.
Several retailers are under severe financial strain as the face their quarterly rent deadline at the end of this month.
Earlier this year, the rent deadlines at the end of March and June resulted in a series of retailers entering administration including Focus DIY, Habitat, TJ Hughes and fashion chain Jane Norman.
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