John Lewis has reported a sharp decline in profits during the pandemic, meaning chair Sharon White “does not expect to reopen all John Lewis shops at the end of lockdown”.

The department store and grocery group suffered a pre-tax loss of £517m in the year to January 30, down from a profit of £146m the previous year.

White attributed this to substantial exceptional costs of £648m, including the depreciation in value of John Lewis’ stores, which have been shuttered due to government restrictions for much of the past year.

She also said the retailer had incurred costs from restructuring and redundancies from store closures and at its head office.

White claimed the retailer would have reported further losses if it had not been for government support including business rates relief and furlough, which she said was critical to protect the business.

John Lewis will therefore continue to claim rates relief from April until June, but will be “kept under review”.

The retailer has reported positive growth in online – Waitrose.com has grown fourfold since February 2020, taking in around 240,000 orders a week, while Johnlewis.com’s sales were up 73%, now accounting for three quarters of the department stores’s total.

John Lewis has also introduced online services including nursery, home interiors advice, wine tasting and cookery courses, available via Zoom.

Last year, the partnership permanently closed eight loss-making John Lewis and seven loss-making Waitrose stores, with more closures expected in the near future.

White said in a letter to partners: “All our John Lewis stores need to be exciting places to shop, more reflective of the tastes and interests of local customers. This will require investment and we are working closely with landlords and local authorities. We are keen to play our part in the revitalisation of the high street.  

“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store. Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain. We are currently in discussions with landlords and final decisions are expected by the end of March.”

She added: “We are going through the greatest scale of change in the Partnership’s 156-year history. As employee-owners, we share the responsibility of securing the Partnership for future generations of customers and Partners. Difficult decisions taken now will hopefully set the course for those next generations.

“I know I am asking so much of Partners. Retail is changing fast around us. And the Partnership is adapting just as fast. What won’t change are the principles and values in which the Partnership is rooted. We have withstood our toughest test and emerged stronger. The strength of the Partnership has seen us successfully navigate the pandemic and will see us to a successful future.”