By James Davey
LONDON (Reuters) – British retailer the John Lewis Partnership posted a deeper first-half loss but struck an upbeat tone on its Christmas prospects, citing rising customer numbers, and forecast full year profit growth.
The UK’s largest employee-owned business, which runs John Lewis department stores and the upmarket Waitrose supermarket chain, generates most of its sales and profit in the second half.
Though the group expects the economic environment to “remain challenging”, it forecast a full-year profit before tax and exceptional items ahead of the 127 million pounds ($172 million) made in 2024/25.
While industry data published Tuesday showed British shoppers spent more in August, retailers are uneasy about how consumer confidence and spending could be constrained by speculation over potential tax increases in the government’s budget on November 26.
The boss of Primark owner Associated British Foods said on Wednesday he was also worried about rising unemployment.
However, Peter Ruis, managing director of the John Lewis department store chain, said consumers would look to Christmas “to get away from the doom and gloom.”
“The general feeling we have is whatever the economy, whatever the external environment, people will come together for a great Christmas,” he told reporters on Thursday, predicting particularly strong sales of Jellycat toys and smart watches.
BIGGER FIRST HALF LOSS
The partnership said higher employer National Insurance contributions and a new packaging levy meant its loss before tax and exceptional items widened to 33 million pounds ($45 million) in the six months to July 26, versus a loss of 4 million pounds in the same period last year.
Sales grew by 4% to 6.2 billion pounds, with department store sales up 2% and Waitrose’s sales up 6%.
Jason Tarry, the former Tesco executive who has chaired the partnership for a year, is leading a revival after the department store division in particular had a difficult period, first battling the COVID pandemic and then the cost of living crisis, cutting jobs and closing stores.
Under Tarry, the partnership has accelerated investment, spending 191 million pounds in the first half, with 600 million pounds planned for the full year.
He said both the department store chain and Waitrose outperformed their markets in the first half, with growth in sales, customer numbers, loyalty and satisfaction.
($1 = 0.7398 pounds)
(Reporting by James Davey; editing by Sarah Young and Tomasz Janowski)
