John Lewis warns ‘significant uncertainty’ lies ahead, as it cuts losses to £29m

The John Lewis Partnership has said it expects inflationary pressures to persist as it acknowledged “significant uncertainty” in the run-up to its key Christmas trading season.

The retailer highlighted the impact of supply chain issues and worker shortages being experienced across the industry.

JLP has reported its half-year results, saying its financial performance was recovering in the wake of the Coronavirus crisis. Pre-tax losses narrowed to £29m in the six months to the end of July, compared with £635m a year ago.

Sales for the group rose six per cent in total, to almost £5.9bn in the first half of 2021, despite high street lockdowns and the permanent closure of eight department stores, while nearly 4,000 staff were axed during this time. The Group is also consulting on further losses, it said.

Profits were helped along by a 12 per cent rise in sales for the John Lewis brand – one per cent up on pre-pandemic levels – and a switch towards “fewer laptops, more lamps and linen sales”.

Technology sales were flat year-on-year, while homeware rose 23 per cent. Talking of, the retailer launched ANYDAY back in April, its new own brand with thousands of home essentials at affordable prices.

“It has been our most successful own brand launch ever for a Spring season,” the company said, “with £56m of sales in the half-year.

Elsewhere, the Partnership has benefited from its significant investment in online shopping. Nearly three-quarters of John Lewis sales were online – compared with 40 per cent two years ago – while stores remained subdued, with like-for-like sales after they reopened 20 per cent lower than in 2019. City centres were hit harder than retail parks and standalone stores.

Sharon White, Chairman of the John Lewis Partnership, said that even with the success of the vaccination programme, the course of the pandemic this winter “is hard to call”.

“Traditionally, our profits are skewed to the second half of the year because of the importance of Christmas, especially in John Lewis,” Ms White continued.

She also confirmed the continuation of the Partnership Plan, including expanding areas dedicated to John Lewis within Waitrose stores – to approximately 40 shops by early 2022.

Further plans and measure to “mitigate risks” around labour and supply chain issues, the Partnership revealed that it was hiring 7,000 temporary workers ahead of Christmas (2,000 more than last year), plus 550 permanent drivers and warehouse staff.