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John Lewis has warned it will take a further two years to complete a turnaround of the department store chain and supermarket group Waitrose as it posted another loss for the first half of the year.
The retailer blamed high inflation and ballooning staff costs for the delay, as it sought to become a simpler and more productive group. Chair Dame Sharon White has been spearheading a five-year revival plan, the completion of which has now been pushed back to 2027/28 from 2025/26.
However, there were some signs of recovery in its latest results. The company posted a first-half loss before tax of £57.3mn, a 14 per cent improvement on the £66.8mn loss it recorded during the same period last year.
Total group sales were £5.8bn in the half, up 2 per cent year on year, with Waitrose sales up 4 per cent and John Lewis down 2 per cent. Revenue was up 3 per cent, with Waitrose up 5 per cent and John Lewis down 3 per cent.
White said: “While change is never easy — and there is a long road ahead — there are reasons for optimism. Performance is improving. More customers are shopping with us.”
The lift in sales at Waitrose was partly driven by price rises, which were up on average by 9 per cent over the period, while volumes were down 5 per cent. At John Lewis, shoppers purchased fewer so-called big-ticket items such as furniture and electronic appliances, which are typically more profitable, but clothing and beauty sales were resilient.
The group said that despite the uncertain economic outlook and consumer sentiment, it expected its financial performance for the year to improve. Both brands typically make most profit in the months before Christmas.
Chief executive Nish Kankiwala, who was appointed in March, said efforts to modernise the group were “well under way”.
Total net debt edged up to £1.6bn in July from £1.5bn in January, but the mutual expected to improve its debt ratio by the year end, which was 4.4 times at the end of last year. It does not provide an update at the half year.