Yahoo Finance John Lewis reports £99m loss ahead of Christmas quarter
John Lewis has warned of a "uncertain" outlook ahead of the key Christmas period as the cost of living crisis drove it to a £99m ($114) loss in the first half.
The retailer's losses widened after facing "unprecedented" cost hikes and cautioned over a "highly uncertain" end to the year.
The staff-owned group, which also includes the Waitrose supermarket chain, said it had allowed its loss to widen from £29m a year earlier to protect both customers and staff from soaring inflation.
Excluding exceptional items, the company lost £92m, compared to a profit of £69m in the six months to 30 July last year.
It said that the impact of the cost of living crisis, specifically around energy costs, was "evident in patterns of spending", with sales of John Lewis' own-brand items rising 28% and energy saving goods, such as air fryers and smart thermostats, also increasing.
Waitrose, its high-end grocery business, suffered a 5% drop in like-for-like sales in the period.
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Sharon White, chair at John Lewis Partnership said: "We are forgoing profit by making choices based on the sort of business we are, by helping our partners, customers, communities and suppliers."
She said that customers were less likely to splash out on "big ticket" household products, choosing to spend their available cash on restaurants and holidays instead.
"No one could have predicted the scale of the cost of living crisis that has materialised, with energy prices and inflation rising ahead of anyone’s expectations," she added. "As a business, we have faced unprecedented cost inflation across grocery and general merchandise."
Consumers have been reigning in spending, with shoppers more likely to spend in discount supermarkets like Aldi and Lidl.
New figures from the Office for National Statistics on Wednesday also showed the cost of food rose at the highest rate since 2008.
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The partnership also announced additional support for its staff, including a one-off payment of £500 for full-time workers.
The support is part of a £45m package to help with the surging cost of living, as well as moves to increase the entry level pay for employees by 4%, which will cost it £10m over the second half.
White, which said a successful Christmas was "key for the business", added that a bumper festive period beyond previous years was needed to "generate sufficient profit" to allow the group to pay workers their usual bonus.
The retailer 10,000 temporary staff in the UK to meet demand in an effort to push for Christmas sales — that is 3,000 more than the chain hired for the same period last year.
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