John Lewis Partnership Plc blamed the UK’s “unprecedented cost-of-living crisis” as it posted a loss of £99 million ($114 million) in the first half of the year.
(Bloomberg) —
John Lewis Partnership Plc blamed the UK’s “unprecedented cost-of-living crisis” as it posted a loss of £99 million ($114 million) in the first half of the year.
The pretax loss widened from £29 million a year earlier, with the company — which is owned by its employees — saying it had chosen to protect both customers and staff from soaring inflation.
Workers will be given a £500 one-off bonus, while entry-level pay will increase 4%. John Lewis had already said it would provide free food to employees, including hot meals, during winter.
“We are forgoing profit by making choices based on the sort of business we are,” Chairman Sharon White said, “by helping our partners, customers, communities and suppliers.”
“The outlook is uniquely uncertain,” White said, due to the war in Ukraine and high global energy costs.
Excluding exceptional items, John Lewis lost £92 million, compared with a profit of £69 million a year earlier.
Waitrose, its high-end grocery business, suffered a 5% drop in like-for-like sales.
John Lewis is under pressure from consumers cutting back on non-essential spending as they prioritize cash for energy bills and other crucial costs.
“We have seen customers move their discretionary spending from high margin, big-ticket household items to restaurants and holidays,” White said. “From dining room furniture to dining out.”
Waitrose has lost ground to cheaper competitors with shoppers changing their habits to visit discount supermarkets Aldi and Lidl. The partnership has been shutting stores and cutting costs under the leadership of White, a former telecommunications regulator who joined the employee-owned company in 2020.
In a push for Christmas sales, John Lewis is hiring 10,000 temporary staff in the UK to meet demand, 3,000 more than the chain hired for the same period last year. But with rising energy bills and the threat of a recession on the horizon, consumers are unlikely to splash out.
(Adds details on staff bonus and pay rise in third paragraph)
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