Retail Giant Struggles Amid Rising Costs and Reduced Spending

  • John Lewis reports H1 loss of £99m
  • Waitrose sales drop 5% year-on-year to £3.6bn
  • John Lewis sales grow 3% year-on-year to £2.1bn
  • Fashion category sees 25% growth, Anyday sales up 28%
  • Energy saving items see increased demand
  • Total customers up 4% and 6% for John Lewis and Waitrose respectively
  • Company’s outlook for the rest of the year uncertain due to cost of living crisis

John Lewis has reported a loss of £99 million for the first half of 2022, attributing the decline to reduced customer spending and increased costs due to inflation. Waitrose sales dropped by 5% year-on-year to £3.6 billion for the 26 weeks ended 30 July 2022, with a trading operating profit falling by £93 million to £432 million. Despite this, John Lewis sales grew 3% year-on-year to £2.1 billion and maintained an operating profit of £295 million compared to the previous year. The company’s share of sales in shops has increased to 41% for H1 FY22 from 26% in H1 FY21, with city centre stores experiencing a strong return as offices reopen. Fashion saw a 25% growth in sales, particularly in holiday wear and summer breaks, while John Lewis’s own-brand Anyday experienced a 28% rise in sales. Energy-saving items also witnessed increased demand, with air fryer sales up 56% and smart thermostats up 8%. The number of customers has risen by half a million for both brands, reaching 12.2 million for John Lewis (up 4%) and 13.4 million for Waitrose (up 6%). However, the company’s outlook for the rest of the year remains uncertain due to the impact of the cost-of-living crisis on discretionary spending.

Factuality Level: 8
Factuality Justification: The article provides accurate information about John Lewis’ financial performance, including sales figures, profit margins, and the impact of inflation on their business. It also discusses the company’s response to the cost of living crisis and their focus on sustainability and community support.
Noise Level: 3
Noise Justification: The article provides relevant information about John Lewis’ financial performance and offers some insights into the impact of inflation and customer behavior on their sales. It also mentions efforts to address the cost of living crisis and the company’s focus on its purpose. However, it does not delve too deeply into the underlying causes or potential long-term consequences of these trends.
Financial Relevance: Yes
Financial Markets Impacted: John Lewis and Waitrose’s financial performance
Financial Rating Justification: The article discusses the financial performance of John Lewis and Waitrose, including their losses, sales growth, and profit margins, which directly pertains to financial topics.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk