John Lewis pushes turnaround plan back two years as losses narrow
Losses at The John Lewis Partnership have shrunk but the struggling retail asset has warned that its ambitious turnaround plans have been pushed back two years.
The struggling retail vessel, which owns grocery store Waitrose and the namesake department store, said losses before tax and exceptional items fell from £66.8m to £54.5m in the half year when compared to the same period last year.
Waitrose showed signs of improvement with sales up four per cent to £3.7bn as the business was bolstered by the roll out of its £5 meal deal which appealed to shoppers during the cost of living crisis.
The partnership last week warned of job losses at Waitrose as it shakes up its staff hours, while last month, JLP said it was looking for around 8,000 Christmas staff.
However, at John Lewis sales were down two per cent to £2.1bn as the company was hindered by shoppers putting off buying “big ticket items” such as technology.
White, who just survived a confidence vote over her leadership in May, said she expects an improved full year financial performance compared to last year’s performance.
“We typically make most of our profit in the last three months of the year so a successful peak is always critical,” she said.
White, set out her turnaround plan in late 2020 to grow the business profits to £400m in five years. But since then the business has continued to be hit hard by post-pandemic shopping habits and roaring inflation.
Earlier this year, she warned that the employee owned company would scrap staff bonuses to help off set falling profits.
“Profits have been struggling at John Lewis for a number of years amid high costs relating to its vast store estate and the rise in cheaper e-commerce rivals like Amazon. Waitrose has struggled as customers become increasingly price sensitive amid the elevated inflation, rising interest rate environment, as well as stiff competition from cheaper rivals like Aldi and Lidl,” Victoria Scholar, head of investment, interactive investor said.
“Focus will be on the all-important festive period when John Lewis typically enjoys a seasonal boost. Dame Sharon White has a daunting task at hand to revive John Lewis’ fortunes at a challenging time for retail more broadly, laid bare by the recent collapse of Wilko.”