John Lewis Partnership reports increase sales, but drop in profits

John Lewis Partnership reports increase sales, but drop in profits

John Lewis Partnership reports increase sales, but drop in profits

However, their hard work throughout the year was key to delivering gross sales of GBP11.60 billion, up 2.0%, with like-for-like increases in both Waitrose and John Lewis.

BONUSES for 84,000 John Lewis and Waitrose staff have been cut for the fifth year in a row.

Chairman Sir Charlie Mayfield said he expects the number of staff will "continue to decline" even as the firm slashed headcount by 1,440 previous year.

In a statement issued today (8 March), Sir Charlie Mayfield, Chairman of John Lewis Partnership, said that 2017 had been a "challenging year" with subdued consumer demand and profits were down "mainly as a result of intensifying margin pressure in Waitrose".

He also cautioned that the group expects "further pressure on profits" over the year ahead amid volatile trading.

Yesterday, struggling retailer New Look had announced plans to shut 60 stores which could affect around 1,000 jobs in the UK.Earlier that, Toys R Us and Maplin had collapsed into administration, putting around 5,000 jobs at risk.

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Lower profit margins at the Waitrose driven by the fall in the value of the pound cut pretax profits by almost 22%. Waitrose gross sales were up 2.7% (up 2.4% like-for-like, excluding fuel) and John Lewis gross sales were down 2.8% (down 3.4% like-for-like).

In the first five weeks of the new financial year, the partnership recorded 0.6% year-on-year growth in gross sales.

Waitrose saw like-for-like sales grow by 0.9% but at the expense of a 42% dive in operating profits, as higher costs were not passed on in prices.

Following a profit warning in January, Sir Mayfield said the business chose to reduce the proportion of profits paid as Partnership Bonus a year ago in a bid to absorb the impact of tougher trading conditions.

The supermarket, a Top50 retailer in IRUK Top500 research, said lower margins in food, as it decided not to pass all cost increases to its shoppers, and investments in customer experience had hit profits over the year.

The news comes as John Lewis introduced a new concierge-style shopping experience at its new Oxford store, where staff had been provided "theatre training" by The Oxford Playhouse to teach them "the art of outstanding service". As a result, it anticipates further pressure on profits but said it will see benefits this year from the "many changes" it implemented in 2017/18.

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