Waitrose boss Mark Price has warned that “substantive” cost increases this year – including the living wage – could hamper its bottom line in the short term.  

Price, who leaves the grocer in April, said continued price deflation, the Government’s new living wage and business rates will “make for a pretty challenging environment for everybody in food retail”.

He added: “The thing that would help most is price inflation, but that doesn’t look as though it’s coming through at the moment.

“We will take a long-term view, as part of the John Lewis Partnership. We want to pay our people competitively.

“But it will be very hard to grow profit in the short term because of those costs.” 

It came as Waitrose reported a 1.4% slip in like-for-likes in the six weeks to January 2. Total sales rose 1.2%.

Price said the like-for-like figure is likely to be “in the middle” compared with its grocery rivals over the Christmas period.

But he added: “It was a very profitable Christmas for us, I’m pleased with where we’ve come out in terms of performance and profit.”

In its first half, reported in September, Waitrose said its profits were broadly flat, while like-for-likes fell 1.3%.

Price will leave Waitrose on April 3 and will be succeeded by Rob Collins, it was revealed last year. Reports suggest Price is eyeing the chairman role at broadcaster Channel 4, where he is already deputy chairman.