The John Lewis Partnership said 2009 will present further challenges for the retail bellwether after full-year pre-tax profits slumped 26 per cent to just under £280m.
The group, which comprises the John Lewis department store chain and grocery arm Waitrose, slashed its staff bonus to 13 per cent, down from a record 20 per cent the year before but still higher than expected.
Chairman Charlie Mayfield said: “2008 was a rollercoaster year, a year of change.”
He added that he expected the first half of this year to be “very difficult” but that “there is a chance we will see some stability in the second half and some uplift at the end”.
The retailer is committed to its expansion plans, which means opening a further eight stores by 2013. Stores in Cardiff and Stratford are on track but others are hampered by development delays.
The partnership’s pre-tax profit in the year to January 31 fell£100.2m to£279.6m after the retailer was forced to cut prices to defend market share. Total sales grew 3 per cent to£6.97bn. Like-for-likes fell 3.4 per cent at John Lewis and rose 0.4 per cent at Waitrose. The group has invested£30m in each business to keep prices competitive.
John Lewis’s performance was adversely affected by sales of home-related goods, which fell 6.7 per cent to£962m. Fashion sales rose 4.7 per cent to£928m and John Lewis will launch a fashion-dedicated website to rival Asos.com this autumn.
John Lewis managing director Andy Street said its previously announced consultation with staff will affect 15 to 20 non-customer facing roles per shop.
Five weeks into the new financial year, like-for-likes were down 8.8 per cent and 0.6 per cent at John Lewis and Waitrose respectively.
Waitrose chases value
Waitrose launched its value line Essential in stores this week as it seeks to satisfy customers’ “everyday to gourmet” needs, writes Jennifer Creevy.
As revealed by Retail Week last week, the 1,400 range marks an investment of£20m to£25m. There are 200 new lines and the remainder will be repackaged.
Waitrose managing director Mark Price said the range does not compromise on quality and additional sales generated are expected to offset the margin hit.
Price revealed Waitrose had been interested in buying Booths, which it formed a strategic buying alliance with last September.