John Lewis has said its profits more than halved in the first six months and warned that weaker consumer demand caused by Brexit uncertainty and rising prices will hit the business in the remainder of the year.
The group, which owns Waitrose supermarkets as well as the John Lewis department store chain, said it was operating in a tough retail market as UK consumers were less willing to spend money against a backdrop of higher inflation and political uncertainty.
John Lewis chairman Sir Charlie Mayfield said the retailer had not passed on to shoppers the full extent of its own rising costs
“Nobody should be surprised that this is a tough market for retailers. There’s any number of reasons for that,” he told BBC Radio 4’s Today programme.
“The reason our profits are down is predominantly because of margin, and cost prices are rising. It’s a very competitive market, retail prices are not rising as fast.”
Pre-tax profit at the group fell 53% in the first six months of the year, to £26.6m. When redundancy and restructuring costs were stripped out, pre-tax profit was down almost 5% at £83m as higher costs ate into margins. Group sales rose by 2.3% over the period, to £5.4bn.