John Lewis Partnership has reported a loss of £99m in H1 (to 30th July 2022) – or £92m before exceptional costs – which it says is "largely due to the combination of cost inflation not fully passed on to customers, impact of cost of living crisis, unwinding of Covid shopping patterns and investments to support partners, customers and suppliers".
The loss compares to a profit of £69m in the same period last year, and a loss of £52m three years prior.
"It is not unusual for us to make a loss in the first half of the year - we have done so in three of the last four half years," says chairman, Sharon White. "Our trading is heavily skewed to Christmas with most of our profits coming in the last quarter of the year."
Sharon says the loss was largely due to inflation, and emerging consumer trends such as the move on discretionary spending from high-margin, big-ticket household items to restaurants and holidays - "from dining room furniture to dining out".
LFL sales at John Lewis were up +3% YoY, to £2.1b (and up +4% on 2019), driven by a return to shops.
The share of sales in shops averaged 41% in H1, compared to 26% last half year and 60% before Covid. The partnership says that city centre stores have come back most strongly, with the return to more office working.
The home category, which performed strongly during the pandemic, declined YoY, falling from 30% of the retailer's category mix to 28% YoY.
Total customer numbers reached 12.2 million, up +4% YoY, while John Lewis Trading's operating profit was maintained at £295m.
The retailer achieved cost savings of £90m, and ended the half with a strong balance sheet with £1.5b "to help weather further shocks".
Its outlook for the rest of the year is "highly uncertain", but it has nonetheless taken steps to provide additional support for its staff, in the form of one-off cost of living support payments, pay increases, meals for vulnerable communities, and more.
The rollout of the John Lewis ‘shop within a Waitrose shop’ continues - expanding from 49 currently to 88 stores by the end of the year – and the trial of a new-concept John Lewis format will launch early next year.
