John Lewis warns of 2-year delay to turnaround plan

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Department store chain and supermarket group Waitrose posted another loss in the first half of the year and will take another two years to turn a profit, John Lewis has warned.

The retailer blamed high inflation and ballooning staff costs for the delays as it attempts to become a simpler, more productive group. Chairperson Dame Sharon White has been spearheading a five-year regeneration plan, the completion of which has now been pushed back from 2025/26 to 2027/28.

However, its latest results showed some signs of recovery. The company’s pre-tax loss in the first half was 57.3 million pounds, an improvement of 14% from the loss of 66.8 million pounds in the same period last year.

The group’s total sales in the first half of the year were 5.8 billion pounds, a year-on-year increase of 2%, of which Waitrose sales increased by 4% and John Lewis sales decreased by 2%. Revenue rose 3%, with Waitrose up 5% and John Lewis down 3%.

White said: “While change is never easy and there is still a long road ahead, there is reason to be optimistic. Performance is improving. More customers are shopping with us.”

Waitrose’s sales growth was partly driven by price increases, which increased by an average of 9% during the period, while volumes fell by 5%. At John Lewis, shoppers bought fewer so-called big-ticket items such as furniture and appliances, which tend to be more profitable, but sales of clothing and beauty products were strong.

The group said it expected financial performance to improve this year despite uncertainty about the economic outlook and consumer confidence. Both brands typically make the most profits in the months leading up to Christmas.

Chief executive Nish Kankiwala, who was appointed in March, said efforts to modernize the group were “well underway”.

Total net debt edged up to 1.6 billion pounds in July from 1.5 billion pounds in January, but Mutual expects to improve its debt ratio by the end of the year, which was 4.4 times higher than at the end of last year. It does not provide half-year updates.