What: John Lewis Partnership misses profit targets after disappointing Christmas sales, with internal documents revealing performance fell short of GBP 131 million full-year expectations.

Why it is important: The missed targets, despite earlier optimism and significant investment plans, demonstrate the complexity of retail transformation in an environment of weakening consumer confidence.

Internal documents reveal John Lewis Partnership has fallen short of its sales expectations during the crucial festive period, making it unlikely to achieve its targeted GBP 131 million full-year profit. The company attributes this underperformance to lower consumer confidence and weaker market conditions in the month to December 21, though noting that some key trading days fell outside this period. This setback comes at a critical time for the retailer, which had previously expressed confidence in September about strong demand and anticipated significant profit growth from the previous year's GBP 56 million. The results are particularly noteworthy as they contrast with successful Christmas trading reported by other retailers, suggesting John Lewis may be facing specific challenges in maintaining its position as the destination of choice for Britain's middle classes amid rising competition from resurgent rivals like M&S.

IADS Notes: John Lewis's disappointing Christmas performance represents a significant deviation from earlier expectations. In October 2024, the company had expressed cautious optimism about the holiday season and demonstrated confidence through an announced GBP 800 million brand investment. This optimism was partly justified by September 2024's improved performance, which showed reduced losses and a 2% overall sales increase, though notably driven more by Waitrose than department stores. The gap between these positive indicators and the actual holiday results suggests both the volatility of current market conditions and the challenges in accurately forecasting performance in a rapidly evolving retail landscape, particularly as traditional department stores continue to face intense competition from more agile competitors.

John Lewis had disappointing festive season