John Lewis plunges into £99m loss as shoppers cut spending

John Lewis plunges into £99m loss as shoppers cut spending

(Bloomberg) – John Lewis Partnership Plc has blamed an “unprecedented cost of living crisis” in the United Kingdom, which posted a loss of 99 million pounds ($114 million) in the first half of the year.

The loss before tax expanded from 29 million pounds the previous year, as the company – which is owned by its employees – said it chose to protect both customers and employees from rising inflation.

“We turn a profit by making choices based on the type of business we are in, by helping our partners, customers, communities and suppliers,” said Chairman Sharon White.

White said, because of the war in Ukraine and rising global energy costs.

Excluding exceptional items, John Lewis lost £92m, compared to a profit of 69m the previous year.

Waitrose, its high-end grocer subsidiary, suffered a 5% drop in similarly comparable sales.

John Lewis is under pressure from consumers who cut back on unnecessary spending because they prioritize cash for energy bills and other critical costs.

“We’ve seen customers move their discretionary spending from high-margin and high-ticket household items to restaurants and vacations,” White said. From dining room furniture to dining out.

Waitrose lost ground to cheaper competitors with shoppers changing their habits of visiting discount supermarkets Aldi and Lidl. The partnership closed stores and cut costs under the leadership of White, a former telecoms entrepreneur who joined the employee-owned company in 2020.

In a bid for Christmas sales, John Lewis is hiring 10,000 temporary staff in the UK to meet demand, 3,000 more than the chain hired for the same period last year. But with soaring energy bills and the threat of a recession looming, consumers are unlikely to turn away.

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