John Lewis reports strong festive sales but warns that ‘profit is under pressure’

During the six weeks to 31 December, Waitrose’s gross sales excluding fuel rose by 4.8% to £914.9 million with like-for-like sales growth of 2.8%.
Meanwhile, gross sales at John Lewis were up 4.9% to £998.1 million with a 2.7% increase in like-for-like sales.

At John Lewis the channel mix saw a continued shift to online. Shopping on mobile phones was the online channel of choice with sales up 80.9% and accounting for 37% of all traffic. Click & collect sales rose by 14.5%. Shop sales were up, trading well pre-Christmas as last-minute shopping delivered a record week for branches.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “We traded strongly over Christmas with sales up nearly 5% and both Waitrose and John Lewis grew market share.
“Sales were particularly strong in the areas that have been the focus for product innovation this year, such as our Waitrose 1 premium range and John Lewis own-brand fashion.
“Our multi-channel capability has again proved its worth with online accounting for 40% of total sales in John Lewis.”
The retailer said its pre-tax profit before Partnership Bonus and exceptional items for the year to 28 January is expected to be up on last year with lower pension accounting charges offsetting trading pressures on profit.
Its Partnership Board will decide on the level of staff Bonus in March but the company said it is likely to be “significantly lower” than last year due to a challenging market outlook and its focus for investment for the future. 
Mayfield added: “Although we expect to report profits up on last year, trading profit is under pressure. This reflects the greater changes taking place across the retail sector. We expect those to quicken, especially in the next 12 months as the effects of weaker Sterling feed through.
“We will now accelerate aspects of our strategy. This will involve a period of significant change, investment and innovation to ensure the Partnership’s success.”

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