The John Lewis Partnership has warned of lower profits this year on the back of pension charges and low price inflation.
John Lewis reported a 1.9 per cent increase in revenue to £4.5bn for the first half of the year ending 1 August against the same period last year.
Like-for-like sales were down 1.3 per cent in the first half of 2015 at Waitrose, but up three per cent at John Lewis.
Profit before tax and exceptional items fell by 26 per cent year-on-year to £96.7m.
Why it's interesting
John Lewis is widely seen as one of the UK's bellwether retailers. If JLP is struggling, there are sure to be plenty of other shops out there finding it hard too.
Still, the company expects to reduce new debt through “tight cash management”.
What John Lewis said
Sir Charlie Mayfield, chairman of John Lewis Partnership, said:
This has been a solid first half for the group in a difficult market. Both Waitrose and John Lewis are growing sales and increasing market share. Profit before tax and exceptionals was down by £33.9m to £96.7m, predominantly driven by higher pension charges arising from volatility in the market driven assumptions and last year's property profits.
Excluding these, 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.
While the headline might look concerning, the drop in profits is not a sign that John Lewis is struggling with trading - in fact, as both Waitrose and the department store are growing market share, the retailer remains in rude health.