(Sharecast News) – The John Lewis Partnership has pushed backed its recovery plan by two years, blaming record levels of inflation.
The loss-making department store chain, which also owns Waitrose, is focusing on returning to £400m annual profit by 2025/26.
The turnaround – dubbed internally the Partnership Plan – had been slated to take five years. But the group has now pushed back the deadline to 2027/28, after record levels of inflation added £179m to its costs last year.
John Lewis said on Thursday: “The additional costs has sharpened our focus on the partnership’s long-standing productivity challenge.
“A combination of inflationary pressures and greater-than-expected investment requirements for our transformation means it will take a further two years to deliver the Partnership Plan.”
The update came as the firm reported total sales of £5.8bn for the 26 weeks to 29 July, a 2% improvement on the previous year.
Pre-tax losses before exceptional items narrowed by 14% to £57.3m, after a rise in operating profits at Waitrose helped offset a weaker performance at the department stores.
Sales at the upmarket supermarket chain rose 4% to £3.7bn and eased 2% to £2.1bn at John Lewis stores.
However, while prices rose on average 9% at Waitrose, volumes fell 5%. At John Lewis, demand for fashion and beauty items held up, but home and technology sales fell by 5% and 4% respectively as customers held back on big ticket spending.
Chair Sharon White said: “While change is never easy, and there is a long road ahead, there are reasons for optimism. Performance is improving.”
Nish Kankiwala, chief executive, said: “Our transformation to modernise our business is well under way.”
