In what’s been described as “challenging times” for the British high street, profits at John Lewis have tumbled 99% to just £1.2m in the first half of the year.
The chairman of John Lewis partnership Charlie Mayfield has also gone on record warning that full-year profits would also be “substantially lower”.
In a statement, the firm said: “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.”
The department store also pledged to be “never knowingly undersold” – as competitors cut its prices.
The future of the British high street has certainly been under the microscope recently with Sports Direct purchasing House of Fraser in August, while Debenhams, in which Sports Direct has a near 30% stake, called in administrators.
Analysis: Martin Lane, managing editor at money.co.uk
Even the high street elite aren’t immune to the nightmare that has been hitting the retail sector. The John Lewis rebrand and expensive TV ad to promote it might at first seem decadent considering this huge drop in profits, but it could be what the retailer needs to stay in the heart and the minds of the great British public.
The number of high street retailers who have axed jobs, gone into administration or had to shut stores this year is staggering. Consumer habits have drastically changed due to online shopping becoming so convenient. It’s become evident over the years that shoppers are tightening their purse strings where they can and turning to online platforms to find cheaper alternatives. High street retailers simply cannot compete.
Waitrose has been overtaken by both Lidl and Aldi in their grocery market share leaving the luxury supermarket out in the cold. John Lewis on the other hand is having to battle the online retail marketplace where discounts are not just sought after but expected. The partnership has its work cut out to recover from this.