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John Lewis profits offset by pensions

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The John Lewis partnership has reported a 26% drop in pre-tax profits in a half-year update, blaming pension changes which will be £60m higher than last year, as well as a tough trading environment.  

Although Waitrose’s like-for-like sales fell for the first time in seven years, theupmarket grocer did relatively well in a highly competitive grocery market, managing to grow market share amid the supermarket price war.   

There was an18% increase in the number of ‘myWaitrose’ care holders, whilst the retailer’s game-changing ‘Pick Your Own Offer’ scheme, which allows customers to select ten products to save 20% on every time they shop, now has 700,000 registered customers. 

In contrast to other retailers, online sales at Waitrose were down by 13%, though the group claims this was impacted by a ‘strong promotion-driven performance last year’. Average order value was up by 8.2%. Sales at Johnlewis.com were up by 17.1% to £647m, though when addressing the results the company pointed out that online returns to shops are currently deducted from shop sales. 

“This has been a solid first half for the Partnership in a difficult market,” Sir Charlie Mayfield, Chairman of the John Lewis Partnership, said. “At a trading level our profits were broadly level with last year, despite the turmoil in the grocery market. That reflects tight management of costs and the steps we have taken to strengthen the appeal of our trading brands, where we have seen an encouraging increase in the number of customers shopping with us. 

Published on Thursday 10 September by Philip Gallagher

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