What: Cost inflation across grocery and general merchandise has greatly affected the retail group’s profitability with a decline of 99-million-pounds compared to its 69-million-pound profit last year.

Why it is important: Despite the loss, John Lewis will continue to support its full-time staff with a one-off cost-of-living payment of 500 pounds on top of the free food promised to employees during the holiday season.

The pandemic had artificially inflated shopping basket sizes which have since plummeted as consumers’ behaviour has shifted due to inflation. Waitrose sales dropped by 5% and operating profit fell by 93-million-pounds. Fashion however performed well over the first half driven by a return to in-store shopping, growing 25% compared to the previous year. The group’s bargain value own brand Anyday saw a 28% rise in sales as customers began to look for better deals during the later part of H1.

John Lewis is prioritizing its partners by doubling financial assistance and increasing entry-level pay by 4% which will cost 10-million-pounds in the second half. Overall, the retailer plans to invest a total of 45-million-pounds to help partners this year.

John Lewis sales did increase over the first half due to a return to in-store shopping post-pandemic, maintaining an operating profit of 295-million-pounds compared to last year.

John Lewis sees a 99-million-pound loss in H1