John Lewis profits plunge by 99 per cent amid "challenging times in retail"

The owner of John Lewis and Waitrose has revealed half-year profits crashed 98.8 per cent as it battled against "challenging times" and the most promotional market for nearly a decade.

The John Lewis Partnership (JLP) posted underlying pre-tax profits of £1.2 million for the six months to July 28.

It said on a statutory basis, half-year profits slumped 80.5 per cent to £6 million.

JLP said profits have continued to be squeezed by strong competition, as well as the cost of new stores and IT changes, as it moves to keep prices low despite inflation and has offered "unprecedented" levels of price matching through its Never Knowingly Undersold pledge.

The British giant warned that it continues to expect profits in the full 2018-19 financial year also to be "substantially lower".

London-based JLP is an employee-owned firm that operates John Lewis shops, Waitrose supermarkets, and its banking services,

Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: "These are challenging times in retail."

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He added: "Profits before exceptionals are always lower and more volatile in the first half than the second half.

"It is especially so this half year, driven mainly by John Lewis & Partners where gross margin has been squeezed in what has been the most promotional market we’ve seen in almost a decade.

"With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole."

He told BBC Radio 4’s Today programme that "the department store isn’t dead".

He added: "We need cool heads and will continue to focus on the customer."

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